USD Currency Pair 2016
The largest banks recommend buying US Dollar
The world's largest player in the currency market said that the dollar rally will continue in the next two years, growth will be about 10% against major competitors.
The USD will also strengthen against the NZD and SGD in the second half of 2016. Another group of banks also positive on the US currency, according to the fact that the Fed is closer to raise an interest rates, which will be for the first time for almost 10 years.
Despite the fact that the Bloomberg Dollar Spot index this year increased by 9% followed by strengthening by 11% in 2014, its dynamics were uneven. Last quarter, analysts have lowered the forecast because of weaker than expected economic data from the USA and the slowdown of the Chinese economy.
Since October the dollar rally was supported by the US monetary authorities, who declared that the growth of the economy is sufficiently stable in order to consider the rate increase at the Fed meeting on December 15-16.
In 2015 the currency market was dominated by the idea that the Fed will raise rates and the ECB and other major Central banks of the world, on the contrary, will expand stimulus measures. If the Fed decides to tighten monetary policy, the USD could rise to parity against the EUR in the second quarter of 2016.
The forecast for EUR / USD currency pair 2016 projects the fall to the area of 0.95. The first goal at the beginning of the year is at the level of 1.05. Analysts initially planned the drop in the quotations of the EUR / USD currency pair 2016 deeper than 0.90. However, now they have changed their forecast to 500 points for the European currency.
Buying the USD against the JPY is the best way to bet on rising interest rates in the US. Quotations of the CNY against the USD may fall by 10% in 2016 if the United States increases the cost of borrowing. It recommends buying six-month forward contracts on the USD and to sell the CNY traded on the island part of the country.
For several years, the GBP / USD currency pair 2016 is trading in a simple corridor with an upper limit of 1.70 and lower levels of 1.44 – 1.40. The GBP will be weak to the USD and at the beginning of the year GBP/USD will be able to test the range at the levels of 1.35 – 1.40 to attempt a tight test of the lower end of the range.
The Bank of England will not increase the interest rate, while the Fed has already increased, and it is ready to increase it further in the new year. There are also risks associated with trying of England to exit the European Union that is truly able to exert a strong pressure on the British pound.
CAD / USD currency pair 2016 recently showed a downward movement, mainly in response to the dynamics of oil prices, which are quite heavily dependent on the revenues of Canada. USD/CAD pair may continue to decline in the area of the level of 1.3220.