Market news for 15.12.2023
Societe Generale forecasts that the DXY will decline by 5% by early next year. The dollar's fall is expected to weaken due to the difference in GDP growth forecasts for the US, UK and Eurozone for the coming year.
Expectations of a change in the Fed's interest rate led to a 2% decline in the DXY this week. The current short-term target, is 101.
A European Central Bank official told the media that interest rates likely peaked in November. He emphasized the growing threats to inflation and the lack of dialogue among policy makers about rate cuts. EUR/USD showed no reaction to these statements.
The Bank of England left interest rates unchanged, supporting the pound. The head of the bank Andrew Bailey expressed hope that the rates have peaked, but emphasized the need to further reduce inflation before a possible rate cut. Commerzbank experts note that as long as the Bank of England remains cautious, the pound will retain support, but the future depends on how long the bank can maintain the current rate in the face of volatile inflation.
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