Bank of America (BofA) has unveiled its currency market forecast, predicting the EUR-USD exchange rate to hit 1.12 by the close of 2024. Analysts at the bank anticipate the euro’s ascent to be most pronounced in the latter half of the year, positioning their projection above the consensus estimate of 1.08 for the year.
In addition to the euro, BofA’s analysis maintains a keen focus on the G4 currencies. The USD/JPY pair presently hovers around the bank’s year-end forecast for 2024. However, BofA cautions that intervention risks persist within this currency pair.
The British pound (GBP) is another focal point for BofA, with the bank holding a positive outlook on the currency. This optimism stems from robust UK Consumer Price Index (CPI) data, surpassing expectations. Nonetheless, BofA acknowledges that the upcoming UK general election is likely to dominate short-term market attention.
BofA’s broader perspective on the currency markets anticipates a gradual depreciation of the US dollar against most G10 currencies throughout this year and into the next.
Furthermore, the forecast suggests a slightly more pronounced depreciation for the US dollar against higher-beta G10 currencies.