Back
18 Feb 2013
Forex Flash: EUR/USD back to 1.20 lows - UBS
According to UBS strategist Syed Mansoor Mohi-uddin: “Our end 2013 forecast of the greenback rebounding to last year's high of 1.20 against the euro remains dependent on the Fed slowing down and ultimately ending its third round of quantitative easing,” the analyst says.
“Three factors underscore our longer term bullish view on the greenback,” Mansoor expands: “First, the Federal Reserve will be the first of the major central banks to stop employing unconventional monetary policies. Second, dollar diversification by central bank reserve managers and sovereign wealth funds will abate as returns outside the US make it less attractive to increase holdings of foreign portfolio assets. And third, America's oil boom will markedly reduce the country's trade deficit,” he concludes.
“Three factors underscore our longer term bullish view on the greenback,” Mansoor expands: “First, the Federal Reserve will be the first of the major central banks to stop employing unconventional monetary policies. Second, dollar diversification by central bank reserve managers and sovereign wealth funds will abate as returns outside the US make it less attractive to increase holdings of foreign portfolio assets. And third, America's oil boom will markedly reduce the country's trade deficit,” he concludes.