The experts at BNP Paribas expect the EUR/USD pair to fall to a value of 1.15 and the GBP/USD to fall to 1.25 in the first quarter of 2018, according to their weekly ECOWEEK report; published on September 22. The table below shows the group’s forecasts for the exchange rates of a set of currency pairs for the next 5 quarters:
Judging by the values in the table, one might conclude that BNP Paribas has an optimistic outlook on the US dollar for the next two quarters. For example, they expect the EUR/USD pair to drop to 1.17 in the final quarter of this year, and to 1.15 in the first quarter of next year, while the GBP/USD is expected to fall to 1.29 and 1.25 respectively. The situation is similar on the USD/JPY and USD/CHF pairs. Still, it’s important to note that in the second quarter of next year, the experts at BNP suggest that the US dollar will again start to decline. For example, the EUR/USD pair is expected to rise from 1.16 in the second quarter of 2018 to 1.23 in the fourth.
I’d like to remind everyone that banks frequently get their forecasts wrong (and constantly revise them), so this report shouldn’t be taken as a recommendation for buying or selling any particular currency pair, nor should it serve as the sole basis for any decisions, commercial or otherwise.
Personally, I’m interested to see which parts of the forecast will come true. We’ll return to these in time and I’ll write a review on how accurately BNP Paribas predicted the future.
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