Bet on a falling U.S. dollar because the Fed will likely cut interest rates before year-end while the ECB keeps tightening, a pair of strategists contend.
It’s time to bet on a falling U.S. dollar because the Federal Reserve looks likely to cut interest rates before year-end while its eurozone counterpart, the ECB, keeps tightening monetary policy, argued strategists at TS Lombard, in a Wednesday note.
The U.S. dollar went on a rampage in 2022, soaring to multi-decade highs versus major counterparts, including the euro EURUSD , which traded below parity for the first time in over two decades, along with the Japanese yen USDJPY and the British pound GBPUSD . The ICE U.S. Dollar Index soared to a 20-year high in October, but has since retreated by around 15% and has retraced more than 50% of the rally from its Jan. 6, 2021, low to its October 2022 high.
TS Lombard said its chief economist, Steve Blitz, expects decelerating inflation will lead the Fed to end the tightening cycle shy of 5%, with a quarter-point rate hike in February possibly its last of the cycle. He sees rate cuts under way by midyear as the market moves to price in a recession, which would put downward pressure on Treasury yields.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Fed Chairman Jerome Powell has COVID-19, shows mild symptoms, Fed saysFed Chairman Jerome Powell has tested positive for COVID-19 and has mild symptoms, the central bank said in a statement
Read more »
ECB’s Lane: We need to bring rates into restrictive territory – Financial Times“Interest rates are now ‘ballpark’ neutral,” said European Central Bank (ECB) Chief Economist Phillip Lane during an interview with the Financial Time
Read more »
EUR/USD aims to surpass 1.0830 amid hawkish ECB betsThe EUR/USD pair is regaining strength after a sell-off move on Monday. The major currency pair is oscillating below the immediate resistance of 1.083
Read more »
ECB must keep raising rates to fight off inflation, Lane saysThe European Central Bank must raise interest rates to a level that starts to restrict growth and their peak will depend on how the economy responds to the most rapid policy tightening cycle on record, ECB chief economist Philip Lane told the Financial Times.
Read more »
ECB’s Centeno: Q4 growth in Europe will be mostly likely still positiveEuropean Central Bank (ECB) board member and Bank of Portugal Governor Mario Centeno said on Tuesday, “the fourth quarter growth in Europe will be mos
Read more »
Breakingviews - Expansionist dreams threaten ECB digital euro planThe European Central Bank seems to have decided that if anyone is going to make crypto cash out of the euro, it ought to be the European Union itself. But developing a digital version of the world’s second largest reserve currency carries risks for the technocrats tasked with maintaining financial stability. Monday’s meeting of euro zone finance ministers will keep them in the crosshairs.
Read more »