KBC Market Research Desk
KBC Bank
Currencies
EUR/USD
The EUR/USD decline accelerated as the ECB’s QE purchases pressured European yields to incredibly low levels. A temporary rebound occurred after the FOMC decision.
EUR/GBP
EUR/GBP joined the QE decline of the euro. Finally, sterling corrected as the BoE signalled risks from the strong currency on inflation. Markets turn also more defensive on sterling due to the upcoming elections.
USD/JPY
USD/JPY remains paralysed in the upper part of the 115.57/122.03 trading range. Dollar strength prevails. The BOJ doesn’t signal further policy stimulation in the near future.
EUR/CZK
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.
EUR/PLN
The zloty hardly reacted even as the NBP cut its policy rate to 1.5%. Euro weakness prevails and the NBP rate cut is considered the bottom of the cycle.
EUR/CHF
The EUR/CHF cross rate found a new equilibrium in the 1.05/1.10 area. However, ‘selective’ SNB interventions are still needed to prevent further CHF strength.
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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GBP/USD retreats below 1.2550 as USD recovers
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