EUR/USD: Dollar’s upside has further to run in the first half of 2022 – Rabobank

Matías Salord FXStreet

Analysts from Rabobank consider the US dollar’s upside has further to run in the first half of 2022 and they maintain a 6 month price forecast for EUR/USD of 1.10.

Key Quotes:

“We remain constructive on the outlook for the USD, at least through the first half of the year. Aside from supportive interest rate differentials, the USD may be a beneficiary of safe-haven flows in the weeks ahead connected to the news-flow regarding a possible Russian invasion of Ukraine. That said, the bullish USD view is not without risks, particularly in the latter months of 2022.”

“Given that the market is short EURs, a renewed focus on the outlook for a change in direction for ECB policy could trigger a move higher in EUR/USD.”

“We expect EUR/USD can move to the 1.10 area by the middle of the year. However, we see risk that the USD could struggle to add to these gains in the latter part of 2022 and see a return to the 1.12 area on a 12 month view.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold advances modestly past $4,000

Gold looks to consolidate Tuesday’s humble gains just above the key $4,000 mark per troy ounce. Indeed, the precious metal adds to Monday’s bounce despite the better tone in the US Dollar, mixed US Treasury yields and steady caution ahead of the FOMC event on Wednesday.

Crypto Today: Bitcoin, Ethereum and XRP on edge as sell-side pressure intensifies

Cryptocurrency prices are broadly correcting on Tuesday, led by Bitcoin (BTC) edging lower below the pivotal $80,000 level. Ethereum (ETH) mirrors Bitcoin’s neutral-to-bearish outlook, while Ripple (XRP) hovers around $1.30.

Experts agree: Fed policy outlook and geopolitical tensions keep US Dollar bid

The US Dollar Index rallies 0.6% in three days and hits fresh two-week highs above 102.00. Investors return to the US Dollar as markets brace for a hawkish hold by the Fed on Wednesday. Waning hopes of any immediate US-Iran peace deal have provided additional support to the safe-haven USD.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.