Tier 1 newswiremarketwatch.comCentral banksMacro
Loading…
FX BANK FORECAST · COVERAGE
Institutional FX coverage in your inbox
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 39 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 39 institutional desks. No promotion.
The market is buzzing with speculation regarding the Federal Reserve's decision to pause interest rate hikes in October, especially given the persistent inflationary pressures. Analysts suggest that any potential misstep by the Fed could be mitigated by forthcoming actions from the Treasury Department. This situation underscores the intricate balance the U.S. government seeks between controlling inflation and fostering economic growth, which is crucial heading into a critical period for monetary policy.
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). MarketWatch's perspective aligns with the cautious sentiment we see in the current forex landscape.
Goldman Sachs is favorably aligned with this cautious view, projecting a target of 1.10 for the EUR/USD pair, indicating a more optimistic stance amidst the Fed's pause. Meanwhile, BofA counters with a target of 1.04, suggesting a more bearish outlook and reflecting potential skepticism about inflation control. For detailed analysis, see our internal reports on bofa and goldman.
Recent revisions indicate a consensus view leaning toward cautious optimism for the euro, as inflation data starts to stabilize. Additional insights can be found in our study at /research/inflationoutlook.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
Market implications
Focus on the upcoming Treasury announcements as a potential catalyst for EUR/USD. The current consensus target of 1.075 may face pressure if signals from the Treasury hint at aggressive spending or changes in fiscal policy.
Risks to this view
A shift in Fed sentiment towards more aggressive rate hikes could invalidate this cautious view. Any strong economic indicators suggesting overheating could lead to a quicker pivot from the Fed.
Sentiment by currency
USD~EUR~JPY~GBP~Composite USD score: +0.00
How we cover this story