G10 currencies forecast for 2016 – BNPP

By FXStreet FXStreet (Delhi) – Research Team at BNP Paribas, presents the currencies forecasts for G-10 nations for 2016.

Key Quotes

USD: Bullish.

We remain USD bulls into 2016 following the Fed’s first rate hike in almost a decade. The USD will continue to benefit from higher US yields against a backdrop of ECB and BoJ quantitative easing. We are beginning to see a pickup in long-term capital flow support for the USD.

EUR: Bearish.

Interest rates will stay low for a long time and the EUR is likely to continue trading as a funder. The ECB disappointed market expectations in December, but the ECB’s substantial easing measures should prompt continued eurozone portfolio outflows, and we expect EURUSD to reach parity by Q3 2016.

CHF: Bearish.

The CHF’s overvaluation is weighing on growth and inflation, so the SNB could intervene in the FX market against CHF appreciation if necessary. We expect the CHF to remain one of the weakest performing G10 currencies until the year end and in 2016.

GBP: Bullish.

Solid GDP growth and accelerating wage growth continue to support GBP strength. The UK’s balance of payments position continues to improve, with the current account deficit financed by solid underlying FDI and portfolio …read more

Source:: FX Street