The recent weakness of the US dollar against the euro and especially the yen has already led many to tear up their currency forecasts for the year. However, expectations for US monetary policy still seem to be the key driver of the euro exchange rate. We therefore continue to predict renewed euro weakness as the Fed hikes rates further than generally anticipated. The rebound in the yen is harder to explain, but it is the last thing that Japan’s economy needs and therefore also unlikely to be sustained.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services