Swiss Bank Julius Baer, which analysts, according to Bloomberg, gave the most accurate forecasts for currencies in the second quarter, expects the strengthening of the dollar in the third quarter, reports Bloomberg. According to currency strategists Bank, the American currency within the next three months can take away the yen role as a safe haven.
By the end of second quarter yen cheaper against the dollar by 4% to ¥106 = $1, the Euro will drop by more than 2% to $1,08 €1, says chief strategist at currency Julius Baer David Kohl.
In his words, futures traders are underestimating the prospect of rising interest rates by the Federal reserve. This will help the dollar to recover from the worst since the 2011 beginning of the year, he said. “Before, we were supporters of a weaker dollar. Over the next three months the situation can change dramatically,” said Kohl.
Bloomberg calls strategist Julius Baer one of the pessimists in respect of the pound sterling: Kohl expects that by September 30, the pound will fall by about 10% compared with the level on July 5 — to $1,16. On the same mark, says Kohl, the pound will be traded at the end of 2016. The median forecast in a Bloomberg survey of analysts on 31 December — $1.3 per £1.
Julius Baer in the second quarter has moved from second to first place in the ranking of banks with the most accurate currency strategists, according to Bloomberg. Basically, this happened due to the correct rates for courses of pound and the yen, explains the Agency. Analysts at Julius Baer did not expect the victory of the eurosceptics on referendum on UK membership in the EU, but made one of the most bearish forecasts on the pound. They also predicted that the yen will strengthen, becoming a safe haven for investors.
On the day of announcing the results of referendum in which the British decided to withdraw from the EU, the pound against the dollar fell more than 10% — to the lowest level since 1985. Since then, the pound has twice updated its lows for 31 years. The last time it happened on 5 July, when the pound dropped to a mark of $1,3. The Japanese yen, becoming a “quiet Harbor” for investors, after the referendum went up for auction almost three-year highs, soaring above ¥100 for $1.