Exchange Rate Forecasts 2017 - 2018 from Crédit Agricole

Crédit Agricole have released their foreign exchange forecasts covering the remainder of 2017 and through 2018.

US Dollar:

“We now expect the USD to take a shallower appreciation path, but see it extending until the end of 2017, mainly against G10 smalls.”

Euro:

“We revise up our EUR/USD profile for 2017, to account for the better chance that a mainstream party will win the French presidential election and the improved Eurozone economic outlook. EUR remains well below its fundamental fair value and we still project gradual EUR/USD appreciation in 2018.”

The Pound:

“The outlook for the GBP continues to be driven by a tug of war between excessive FX undervaluation and a gradual deterioration of UK fundamentals. Over the longer term, we now see a slightly greater underperformance of GBP vs EUR.”

Commodity Dollars:

“For the antipodean currencies and CAD, we now see less scope for underperformance in Q2 and Q3, thanks to the recent strength of the global business cycle. We lower our projections for Q417 to account for any escalation in risk aversion on the back of tighter global financial conditions and renewed escalation of political risk.”

Scandinavian Currencies + Swiss Franc:

“We keep our forecasts for CHF, SEK and NOK little changed at this stage and continue to expect further gains for the two Scandi currencies as well as some CHF underperformance over the long term.”