[COLOR="Green"]John Taylor: bailout won't save Europe[/COLOR]
March forecast of John Taylor, famous investor managing the world’s largest currency hedge fund FX Concepts LLC, has come true as US dollar strengthened from $1.35 to $1.20 per euro.
Now Taylor believes that US currency may take pause for some time before the new surge that may come if it’ll become clear that the European bailout isn’t helping euro region to get out of the crisis.
The plan of financial help for the indebted euro zone’s countries creates false confidence among the investors that will lead to the serious shock in September. The economist predicts that be the end of 2010 euro will fall to $1. According to his estimates, the holders of euro will be very lucky if the rebound of the single currency lasts during July.
[COLOR="green"]Millennium Asset Management: dollar won’t rise versus euro [/COLOR]
Specialists at Millennium Asset Management in London claim that $1.20 level corresponds to the fair value of euro. As a result, they’ve removed one of the arguments in favor of euro’s depreciation.
More than that, note the specialists, the greenback’s growth prospects were connected with the outstanding performance of American economy that isn’t realizing. On the other hand, investors seem to be concerned about possible double dip recession in the United States.
According to Commerce Department’s data released on June 25, US first quarter economic growth pace of was equal only to 2.7% in comparison with 3% last month’s consensus. The underlying problems of the country’s economy are in smaller advance in consumer spending and a bigger trade deficit.
[COLOR="green"]Technical Alpha: pound will rise to $1.53/56[/COLOR]
Technical analysts at Technical Alpha in New-York expect pound to rise versus the greenback as it overcame the key cloud’s resistance on the daily Ichimoku chart. The specialists underline that on June 23 British currency went above the upper and lower lines on the chart for the first time in six months.
The target of sterling’s advance lies between the long-term downtrend resistance line at $1.53 and 50% Fibo retracement of the fall from August 2009 to May 2010 at $1.56. Technical Alpha supposes that cloud area on the chart, which acts as support when prices are above may let pound have the minimal July levels between $1.4878 and $1.4580.
[COLOR="green"]Westpac: Aussie will decline to 84 cents[/COLOR]
Analysts at Westpac Banking Corp. expect Australia’s currency to lose 4% against US dollar dropping to 84 cents. As a result, the specialists recommend selling Aussie versus the greenback on its current advance to 88.15 cents. The trade should be stopped if AUD exceeds 89 cent level.
According to Westpac, the decline of Australian dollar may be caused by the slowdown of Chinese economy.
[COLOR="green"]BNP Paribas: euro will decline on fiscal tightening[/COLOR]
Strategists at BNP Paribas SA believe that the efforts of euro area’s governments to conduct fiscal tightening measures while the United States keeps being loyal to monetary easing will result in euro’s decline.
The specialists believe that to assure European economic and fiscal recovery relatively more powerful economies will need to accept higher exchange rates. The single currency is likely to be used for funding while Asian and commodity currencies are going to benefit. The analysts claim that any euro’s attempt to rise above $1.24 would represent selling opportunity for investors.
[COLOR="green"]Bof NY Mellon: yuan’s free trading is likely is the next few years[/COLOR]
Strategists at Bank of New York Mellon Corp. believe that the euro zone’s debt crisis can make China authorize yuan’s free trading.
The country’s now hesitating about its euro investments as much as it’s concerned about dollar holdings. The sole way out in this case is to stop increasing the amount of its foreign-exchange reserves. This, in its turn, would require currency liberalization as it won’t be necessary for the People’s bank of China to perform daily market interventions.
Never the less, free floating of Chinese currency isn’t a matter of a short-term period as country’s authorities won’t regard the matter seriously during the next few years.
[COLOR="green"]JPMorgan Chase: EUR/USD forecast’s raised[/COLOR]
Strategists at JPMorgan Chase & Co. improved their forecast for EUR/USD as it’s now quite evident that the United States won’t increase interest rates in the near future.
JPMorgan Chase predicts that the single currency will trade at $1.25 area until the second quarter of 2011 resting flat versus the greenback. The previous forecast was that euro will start declining by the end of this year dropping to $1.20 and getting down to $1.18 by the end of the first quarter of 2011.
[COLOR="green"]On-line analytics from FBS always is available on: http://www.fbs.com/analytics/news_markets[/COLOR]
