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Goldman Sachs' chief economist, Jan Hatzius, asserts that the dollar, despite a recent 5% decline, remains overvalued and is likely to depreciate further due to structural portfolio imbalances and high valuation levels. Historical trends indicate potential declines of 25-30%, driven by non-US investors holding $22 trillion in US assets, with a significant portion unhedged. A modest reduction in these holdings could lead to substantial dollar depreciation, suggesting a multi-quarter downtrend ahead.
UBS has adopted a more positive outlook on the Canadian dollar, noting that easing U.S. tariff threats have provided relief, despite ongoing macroeconomic challenges. The firm projects a gradual decline in the USDCAD pair, targeting 1.36 by March 2026, while remaining cautious about long-term risks from industry-specific tariffs and domestic economic pressures. Political dynamics, particularly with the upcoming Canadian federal elections, could further influence the CAD's performance.
Foreign investors have sold $63 billion in US equities since early March, primarily driven by European investors, according to Goldman Sachs strategists. This trend poses a significant risk to equity valuations, as foreign ownership of US stocks reached a record 18% at the start of 2025.
UBS forecasts further weakness for the U.S. dollar, citing ongoing policy uncertainty and concerns over the Federal Reserve's independence. Despite a recent gain, the dollar faces pressure as institutional investors increase FX hedges and capital flows out of the U.S. The bank anticipates EUR/USD will stabilize between $1.12 and $1.16 in the short term, with a gradual rise expected towards $1.18 by March 2026, reflecting a more favorable outlook for the euro amid easing trade tensions and supportive European economic conditions.
China's official PMIs will be released next week, marking the first major data since the significant increase in US tariffs. While anecdotal evidence suggests factory closures and reduced hours, high-frequency data indicates robust steel production and stable car sales. The housing market, however, continues to struggle, showing a significant slowdown. The CNY remains stable against the USD, with potential for slight declines if political developments improve regarding tariffs.
Tokyo's inflation rate surged to 3.5% in April, surpassing analyst expectations, driven by a significant rise in rice prices, which are now 94% higher than last year. The previous year's reduction in school fees had a one-off effect that has now dissipated, leading to a rise in the core inflation rate from 1.1% to 2.0%. Despite this improved inflation outlook, uncertainties remain, particularly due to recent US tariff increases, suggesting that the Bank of Japan may delay interest rate hikes until July.
Russia's central bank (CBR) is expected to maintain its key interest rate at 21.0% during today's meeting, with analysts anticipating a dovish tone from Governor Elvira Nabiullina regarding future rate cuts. Inflation has eased, with recent data showing a decline to 7.1%, down from 14.1% at the end of last year, while economic indicators suggest a slowdown in growth. Despite optimism surrounding the rouble due to potential peace talks, forecasts indicate a gradual upward drift in USD/RUB and EUR/RUB exchange rates over the coming year.
UBS analysts project the USD/CHF exchange rate to trade within the 0.80-0.85 range, influenced by US policy uncertainty and the Federal Reserve's independence. While potential trade deals could support the dollar, significant appreciation above 0.85 is deemed unlikely due to reputational concerns and economic risks. A downturn in the US economy may push the USD/CHF below 0.80, with technical support at 0.80 and resistance at 0.84.
UBS has revised its forecast for the USD/JPY exchange rate, announcing a new target. This adjustment reflects the latest market insights and economic conditions impacting the currency pair. Investors are advised to stay informed on these developments.
Danske Bank forecasts the Euro will reach $1.22 against the Dollar within a year, driven by positive structural growth in Europe and expansionary fiscal policies, particularly in Germany. This outlook contrasts with increasing policy uncertainty and stagflationary pressures in the US, making Europe a more attractive investment option. Additionally, declining energy prices favor Europe, enhancing its economic position relative to the US.
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goldman sachs predicts significant further decline for the dollar
17:57 25.04.2025
ubs bullish on canadian dollar as trade tensions ease
14:31 25.04.2025
foreign investors sell 63 billion dollars in us equities since march
13:24 25.04.2025
ubs raises euro dollar forecasts amid ongoing us policy uncertainty
12:27 25.04.2025
China's PMIs Awaited Amid Trade Tensions and Mixed Economic Signals
12:27 25.04.2025
Tokyo inflation rises to 3.5 percent amid one-off effects and uncertainties
12:19 25.04.2025
russia's central bank expected to maintain key rate amid inflation easing
12:07 25.04.2025
ubs analysts predict usd chf to trade within 0.80 to 0.85 range
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11:47 25.04.2025
ubs revises usd jpy forecast with new target
11:47 25.04.2025
euro expected to reach 1.22 against dollar in next year
11:01 25.04.2025
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