Momentum is clearly pointing in one direction. Lowering our view on GBP/USD, expect pound to hit parity by year-end. Fiscal profligacy against the backdrop of elevated inflationary pressures and stagnant economy are a recipe for an existential crisis in GBP. See EUR/GBP at 0.95 by year-end.
Revising Our EUR/USD forecast lower to 0.95 in Q4 from 1.05 previously. Persistence in elevated core inflation is pushing the Fed into a faster, steeper, and more extended rate hiking cycle, and supporting USD higher across the board in the process. We have also revised up our USD/JPY and USD/CAD projections. -BofA FX Strategy
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