While we currently see EURUSD at 0.95 towards year-end, the pair is not far from that level and could easily come below. If this happens, and there is a good chance it will, then the room will open for EURUSD moving as low as 0.90. Not only has the Fed signalled that US rates will rise even more, but the energy-exporting US economy is shielded from the severe effects the energy crisis will have upon Europe’s economy and which will affect Asia as well. The USD is among the highest yielding G10 currencies that also offers solid protection because of its safe haven status during uncertain times as we are amidst. Hence, the USD currently resembles an insurance that pays out a premium – no wonder the USD has been winning the G10 FX game of thrones over the past year.
For the USD to be dethroned from its prime position, we need to see global economic activity pick up and global growth outperforming the US economy. We also need an improvement of risk sentiment, which is difficult to see so long as the Fed together with the remaining G10 central banks have their foot firmly on the brake-pedal.
-Nordea
تعليقات