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The dollar is still able to update the highs against the euro – Barclays
December 20, 2018 10:25 amVideo
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According to experts of the investment bank Barclays, despite the fact that the US Federal Reserve System (FRS) has taken a more cautious position, it’s not worthwhile to put an end to the US currency.
The day before, at the last meeting in the current year, the regulator raised the interest rate by 0.25% to 2.25-2.5%. At the same time, the Central Bank reduced the number of rate increases expected next year from three to two and signaled that it will make further decisions on monetary policy depending on the incoming data.
“However, this does not mean at all that the peak values of the dollar exchange rate are already behind us and we should expect a quick reversal from it. Prospects for a more moderate increase in rates are already taken into account by the market. Meanwhile, the factors that force the Fed to exercise caution will not go unnoticed by other central banks, including the ECB,” Barclays representatives said.
“Inflation rates in the eurozone remain weak. While the Fed may raise the rate at least two more times, the ECB is still far from tightening its policy. In light of the slowdown in US GDP growth, the weakening momentum of economic growth in China, the unfinished trade war between these two countries, as well as the possibility of similar “military” actions in trade between the United States and the European Union, the prospects for a single European currency look far from positive. Here, we should also add the difficult political situation that has developed in a number of eurozone countries, including Italy. It is assumed that over the next four quarters, the EUR / USD pair will trade near the mark of 1.12 and may well update the multi-month lows,” they added.
The material has been provided by InstaForex Company – www.instaforex.com
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