Both EUR and JPY are likely to strengthen against the US Dollar, according to Mizuho Bank analysts. However, due to relative absence of political noise in Japan, the anti-risk Yen is expected to outperform the common currency.
Also, the probability of central bank’s policy driving down the currency is high in Europe. After all, the Bank of Japan (BOJ) seems to have run out of ammo.
The bank, therefore, expects the EUR/JPY pair to drop to 117 by the end of the year, according to Bloomberg.
Key points
- USD to trade lower on softer yields.
- The US Federal Reserve has more scope for rate cuts than the European Central Bank, which has greater potential to ease than the BOJ.
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