Bloomberg: Investors expect further dollar weakness in the coming month

Source: Bloomberg

Authors: Farah Elbahrawy and Heather Burke

Article: Original article

Publication date: Monday, November 28, 2022

Nearly half of the 388 respondents to the latest MLIV Pulse survey said a scenario in which growth continues to slow down, will dominate globally next year. The second most likely outcome is a deflationary recession, while an economic recovery with high inflation is considered the least likely.

Meanwhile, about 60% of participants expect the dollar to weaken further in a month. This contrasts with last month, when nearly half of respondents said they would go to the November meeting of the Federal Reserve with a long position in the dollar.

“The dollar is likely to weaken throughout 2023,” said Nicole Kornitzer, Paris-based portfolio manager of the Buffalo International Fund at Kornitzer Capital Management Inc., which oversees about $6 billion. "Maybe not dramatically, but the trend is likely to be downward." According to her, a recession in the US and the direction of rates will be the key catalysts for the currency.

Forecast:

EUR/USD will continue to decline