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The USD should act more rationally. The EURUSD rally is going too fast as the market keeps pushing back the Fed’s dovish reversal dates. This is due to various factors such as inflation data for October, slowing the economy and global risk appetite. The derivatives market is currently pricing in expectations of a 100 bps cut in the federal funds rate to 4.5% by the end of 2024. The global risk appetite began to improve, which is good news for EURUSD, and slowing inflation in the US, eurozone, and UK increased the chances of dovish reversals by the world’s leading central banks. Wells Fargo suggests there will not be a soft landing. The price chart of EURUSD in real-time mode indicates that if US stock indices take a break, the same will happen with EURUSD.
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Reevaluating the Rationality of USD Behavior: Expert Forecast as of 20.11.2023
By Gustavo Nils
