INTERNATIONAL. The US Dollar will rally against the Euro to 1.21 over the next few weeks, according to the latest American Express Bank (AEB) monthly “˜Economics for Investment – Currencies’ report, published in association with The Moodie Report.
The August edition, just published, says that US economic growth data should spur the Dollar in coming weeks, with a likely further hike by the Fed in September.
The Japanese Yen should firm, said AEB, saying that the recent string of disappointing Japanese data should come to an end soon. “The upswing should continue and the Yen should move stronger,” it concludes.
Sterling will weaken as UK rates peak and UK economic growth slows. “Most slippage will likely be against the Euro – the US Dollar’s long run problems will probably limit the move [of Sterling] against the Dollar.
“Of other dollar-bloc currencies, we like the Canadian best and the New Zealand Dollar the least,” said AEB. “The Australian Dollar is topping out but shouldn’t fall too much.”
The bank retains its view that a revaluation of the Chinese Renminbi is inevitable – though it is likely to be initially a small 5% repegging. Over the long term, other Asian currencies should strengthen.
Latin American currencies, except the Chilean Peso, should weaken against the Dollar.
For the full report, including short, sharp analysis of 29 different currencies in East Asia, the subcontinent, the Americas, Europe, the Middle East and Africa, click here.
For regular information on currency-related issues, including back issues of the AEB report, visit The Moodie Report Currency Room.
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Dollar to drift further against Yen and Euro says new American Express Bank report – 28/06/04
