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18 Mar 2013
Forex Flash: UBS revises down EUR/USD forecast to 1.3000 in April and 1.28 in June
FXstreet.com (San Francisco) - The UBS analyst team has cut its EUR/USD forecast for the one-month and tree-month windows and after expecting 1.37 in 1-month and 1.30 in 3-month, the bank is expecting now the pair going to 1.3000 in 1-M and 1.28 in 3-M windows.
However, UBS expects the "euro to trade back to 1.20 against the dollar by year end as America's economy outperforms, the Federal Reserve starts scaling back its asset purchases in the second half of the year, foreign central bank and sovereign wealth fund managers desist from dollar diversification and America's shale energy boom cuts the US current account deficit."
On the European side, "Italy's elections and now Cyprus' prospective action against deposit-holders suggest the Eurozone debt crisis is set to weigh on the euro again even before the Fed starts to temper its quantitative easing."
In this line, the bank downgraded its "one and three month EURUSD forecasts from 1.37 and 1.30 respectively to 1.30 and 1.28 while keeping our end year forecast of 1.20."
However, UBS expects the "euro to trade back to 1.20 against the dollar by year end as America's economy outperforms, the Federal Reserve starts scaling back its asset purchases in the second half of the year, foreign central bank and sovereign wealth fund managers desist from dollar diversification and America's shale energy boom cuts the US current account deficit."
On the European side, "Italy's elections and now Cyprus' prospective action against deposit-holders suggest the Eurozone debt crisis is set to weigh on the euro again even before the Fed starts to temper its quantitative easing."
In this line, the bank downgraded its "one and three month EURUSD forecasts from 1.37 and 1.30 respectively to 1.30 and 1.28 while keeping our end year forecast of 1.20."