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UBS forecasts a bearish outlook for the Euro against the Japanese Yen and the British Pound, driven by anticipated economic data rather than the recent ECB meeting. Key indicators, including the preliminary December PMI and France's Insee survey, could signal weaker inflation expectations and prompt more aggressive market bets on ECB rate cuts. UBS maintains a long-term target of 0.8200 for EURGBP, with potential for further declines unless significant external shocks occur.
UBS forecasts a bearish outlook for the Euro against the Japanese Yen and the British Pound, driven by anticipated economic data rather than the recent ECB meeting. Key indicators, including the preliminary December PMI and France's Insee survey, could signal weakness, prompting more aggressive market bets on ECB rate cuts. UBS maintains a long-term target of 0.8200 for EURGBP, with potential for further declines unless significant external shocks occur.
UBS is optimistic about the British pound (GBP), Australian dollar (AUD), and Swiss franc (CHF), predicting rises to 1.35 and 0.68 for GBP and AUD, respectively, due to high interest rates. The Swiss franc is expected to benefit from limited interest rate cuts, with a forecasted USD/CHF rate of 0.84.In contrast, UBS remains neutral on the Japanese yen (JPY), anticipating a potential rise to 155 in the short term but a decline to 145 by 2025. The outlook for the Chinese yuan (CNY) is bearish, with expectations of the USD/CNY rate reaching 7.50 by the end of 2025, driven by trade tensions and risks of further depreciation.
UBS anticipates potential declines for the GBP due to upcoming economic data, particularly following the recent ECB meeting. They predict that the preliminary December PMI data and France's Insee survey could significantly influence market expectations and inflation forecasts. Maintaining a bearish outlook on the euro, UBS expects three 25bp rate cuts by the Bank of England in 2025, while their long-term target for EUR/GBP is set at 0.8200, with a possibility of falling below this level.
UBS anticipates potential declines in EUR/JPY and EUR/GBP due to upcoming economic data, particularly preliminary PMI figures and France's Insee survey. The bank maintains a bearish outlook on the euro, expecting at least three rate cuts by the Bank of England by 2025, while targeting EUR/GBP at 0.8200. Volatility may arise from ECB President Christine Lagarde's comments on US tariffs and economic risks in France.
AUD/USD has bounced off a 13-month low of $0.6337, aiming towards the downtrend line at $0.6446, while the EUR/JPY and USD/JPY continue to rise. USD/JPY has surpassed the 200-day SMA at ¥151.99, with potential resistance at ¥153.28 following this week's high of ¥152.86.
IG
World shares showed mixed results as investors awaited a likely interest rate cut from the European Central Bank. U.S. stock indexes rebounded, with the S&P 500 rising 0.8% and the Nasdaq composite reaching a record close above 20,000, driven by tech stocks. Meanwhile, inflation in the U.S. ticked up slightly to 2.7% in November, indicating ongoing price pressures.
Asian shares rose as Wall Street's rally continued, buoyed by an inflation update that suggests potential Federal Reserve support for the economy. The Hang Seng surged 1.7%, while Tokyo's Nikkei 225 gained 1.3%, driven by technology stocks. In the U.S., the S&P 500 climbed 0.8%, with Tesla jumping 5.9% and Stitch Fix soaring 44.3% after better-than-expected earnings.
Asian shares mostly rose, following a Wall Street rally, as U.S. inflation data suggested potential Federal Reserve support for the economy. The Hang Seng surged 1.4%, while the Nikkei 225 gained 1.2%. In the U.S., the S&P 500 climbed 0.8%, driven by tech stocks, despite a slight dip in the Dow.
Asian shares rose Thursday, buoyed by a Wall Street rally and positive inflation updates that may lead to Federal Reserve support for the economy. The Hang Seng surged 1.7%, while Tokyo's Nikkei 225 gained 1.3%, driven by technology stocks. In the U.S., the S&P 500 climbed 0.8%, marking its first two-day gain in nearly a month, as expectations for interest rate cuts fueled market optimism.
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