KBC Market Research Desk
KBC Bank
Currencies
The dollar rebounded against the euro after the Brexit vote. However, market expectations that global monetary conditions (also in the US) will stay low for longer made the dollar returning most of these gains.
EUR/GBP
Brexit hammered sterling across the board. Market speculation that the BoE might take additional steps even after the August easing, is keeping sterling in the defensive.
Market expectations that the Fed policy normalisation post‐ Brexit will go even slower than already expected weighed on the dollar. At the same time, the market is not convinced that Japanese policy has enough tools left to weaken the yen.
EUR/CHF
Selective SNB action in the currency market and abundant excessive liquidly finally blocked further unwarranted CHF strength .
EUR/PLN
Global positive risk sentiment was supportive for most CE and high yielding currencies, including the zloty. An easing of the domestic growth momentum might revive rate cut expectations and slow the rebound of the zloty.
EUR/HUF
The forint continues to perform well. Global easy monetary conditions and a decent domestic economic performance are enough to stabilize the forint even as the NHB is expected to keep the policy rate at the low level of 0.9% for long.
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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