Bank of America (BofA) has revealed its base case for the foreign exchange market, with a stance that is less techno-optimistic. The bank anticipates moderate softness in the US dollar (USD) through to the end of next year, 2024.
Key Points:
1. Moderate USD Softness Expected: BofA is forecasting that the US dollar will experience moderate softness through the end of next year.
2. Not Banking on Technology Boost: Despite some expectations that technological advancements might contribute to productivity growth, BofA is not including strong productivity growth in its USD outlook. The bank suggests that the US is likely to remain in a softer growth mode for the medium term.
3. EUR-USD Forecast: With its base case of moderate USD softness, BofA expects the EUR-USD exchange rate to be around the 1.15 level by the end of next year. Beyond that, the bank predicts that EUR-USD will move towards its fair value in the 1.20s.
This is via the folks at eFX.
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