USD: Weakens Post-FOMC, Expect Firming Into Year-End With EUR/USD Likely Hitting 1.08 – BofAML

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Here is their view, courtesy of eFXdata:

 Bank of America Merrill Lynch Global Research discusses the USD outlook in light of yesterday’s FOMC policy decision.

“The US dollar rallied initially post-Fed decision but subsequently finished broadly weaker by the close of NY trading, driven largely by increased risk appetite. USD weakness was generally concentrated against traditionally higher beta FX such as the Australian dollar…We continue to see the US dollar firming into yearend and think that the sharp pullback since early October presents a buying opportunity. With the Fed now apparently comfortable with the current stance of policy, we think that the potentially-negative impact on USD via the rate differential channel has been lessened,” BofAML notes. 

We still see EURUSD somewhat weaker by the end of the year, to 1.08, before appreciating again next year to 1.15, in a gradual move towards our equilibrium estimate of 1.20-1.25,” BofAML adds.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.