Euro rises and goes despite negative estimates. Yen heads for biggest rise in six months
The euro rose 0.49% to $1.0270, despite the pessimistic forecasts from Goldman Sachs strategists.
The Wall Street giant has lowered its three-month target for the euro-dollar pair from $1.05 to $0.99, according to an investment bank research note, cited by Bloomberg.
The forecast cut was justified by the team of strategists led by Kamakshya Trivedi with the anticipation of serious disruptions in gas supplies feeding the region and the possibility of the Eurozone entering an economic recession in the second half of the year.
The Bloomberg Dollar Index – which compares the greenback to ten competing currencies – fell 0.59% to 105.275 points. The greenback is under pressure from the release of the US Purchasing Managers’ Index (PMI), which fell from 52.7 in June to 52.2 in July, according to data released this week.
So this number feeds into the perspective, already indicated by the Federal Reserve, of a possible slowdown in the pace of interest rate hikes, if inflation allows. Analysts remain confident of the dollar’s future performance. Although a “cautious” monetary policy outlook is putting pressure on the greenback, “it is still too early to see the dollar enter a persistent negative trend,” defended Francesco Belloz, ING strategist, citing Bloomberg.
In turn, the yen is heading for its longest rise in six months against the dollar. The Japanese currency continues to rise for the fourth consecutive day, adding 1.16% to $0.0076.
According to Bloomberg, the fact that hedge funds are selling the dollar and buying the yen as a safe asset may be the explanation for this “rise”.
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