The currency market remains an extension of market expectations about Fed policy. ING economists explain why their views on the medium-term currency market remain virtually unchanged and focus on a depreciation of the Dollar .
The fall of the Dollar is delayed, not deterred
The dollar is selling expensive, especially after the recent rise in US Treasury yields. In the short term, it could maintain February's gains, but our forecast for larger Fed rate cuts than market prices tilts us in favor of a bearish USD profile for the rest of the year.
We expect the EUR/USD to settle at 1.1400 by the end of the year, as a moderately sized European Central Bank easing package (75 basis points vs. 100 basis points expected) should also support a convergence of EUR rates :USD at the end of the year driven largely by the Fed.
Source: Fx Street
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