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We expect the US Dollar to come under pressure in the month ahead. Risk sentiment should be pretty positive but the ongoing prospect of the accommodative policy from the Fed should undermine the US Dollar. I am looking for the Dollar remain under pressure, despite the positive US data that we saw last night.
What is your EUR/USD forecast for the end of the second quarter?
In terms of our forecast, we actually expect the US Dollar to strengthen against the Euro, but that is more Euro-view. We have got 1.25 at the end of the second quarter before the Euro rally to 1.35.
What is your outlook for the USD/JPY performance in the near term?
We expect the Yen to resume strengthening. I think that the combination of current account surplus and low US yields puts a downside pressure on the US Dollar. Ultimately the Yen will weaken further this year and next year.
What do you expect from the AUD/USD?
In the near term we expect the Australian Dollar to rise, but mostly we expect the Aussie to trade between 1.01 and 1.05. We still think that the Australian economy stands out relative to most of its peers.