A strengthening US dollar may well mean repercussions for the euro, writes Nordine Naam, strategist at Natixis.
Following the euro’s buoyant performance in
2013, a strengthening US dollar may well mean repercussions for
the single currency. Nordine Naam, strategist at Natixis,
examines the trends most likely to dominate the foreign
exchange market in the coming year
With forecasts pointing to global economic growth of more than
2.5% for 2014, the foreign exchange market will largely be
characterised by recovery in the first half of this year. This
will be fuelled by the economic prospects of the US and UK in
particular, but also to a lesser extent China, where domestic
demand is the driving-force of GDP.
That said, it’s also essential to take into
account the risks due to rouse the market. The absence of a
sharp improvement in global trade, for instance, is expected to
penalise emerging countries highly dependent on exports and
commodity prices. Furthermore, disinflationary pressures in
most countries – particularly across Europe –
are set to carry over for most of 2014.
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