KBC Market Research Desk
KBC Bank
Currencies
The EUR/USD downturn stopped mid‐March, after the FOMC softened its stance and the string of weak US data including the payrolls continued. However, the pair’s rebound is modest and points more to consolidation than a turnaround.
EUR/GBP corrected higher following a QE‐induced decline of the euro. UK eco data weren’t as strong anymore, the BoE signalled risks from the strong currency on inflation and uncertainty surrounding the elections weighed. The upward correction didn’t yet break the downtrend yet.
USD/JPY remains paralysed in the upper part of the 115.57/122.03 trading range. The BOJ doesn’t signal further policy stimulation in the near future, even as results from Abenomics are far from convincing.
The Czech koruna returned closer to the CNB floor of EUR/CZK 27 as markets scale back chances that the CNB will ease policy further.
The NBP cuts its policy rate to 1.5% early February, but the zloty barely budged. However the zloty rally got more fuel from EMU QE (euro weakness) and market speculation the Fed will postpone its lift‐off. EUR/PLN 4 is now under test.
The forint remained strong in past months. On the one hand, there was euro weakness due to the ECB’s QE programme, while otherwise the Hungarian fundamentals improved sharply.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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