The dollar is heading lower. Deutsche Bank economists forecast that the EUR/USD pair is at 1.15 throughout 2023.
The pieces are coming together for a more sustained fall in the dollar
“The pieces are falling into place for a more sustained decline in the dollar. The combination of the reopening of China and the improvement of the European energy situation should reduce the safe haven premium that underpins the dollar.”
“The steepening of the US yield curve that is often associated with clearer dollar downtrends has not yet occurred, and the dollar remains a very profitable currency in a global context. However, as confidence builds in a top inflation narrative, we see EUR/USD rallying as high as 1.15 over the course of 2023“.
“Tailwinds come from: a) the narrowing of rate spreads between the Fed and the ECB, and a structurally easier fiscal policy in Europe; b) the improvement in basic balances in Europe given lower energy imports and the fall in bond outflows from Europe; c) the beta to the reopening of China and the global growth cycle; and d) large cash positions in an overvalued dollar.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
