In addition to the euro, BofA’s analysis remains focused on the G4 currencies. The USD/JPY pair is currently trading around the bank’s year-end forecast for 2024. However, BofA noted that there are still risks of intervention in the currency pair.
The British pound (GBP) is also on BofA’s radar, with the bank maintaining a constructive outlook on the currency. This optimism is fueled by stronger-than-expected UK Consumer Price Index (CPI) data. Nevertheless, BofA acknowledges that the upcoming UK general election will likely dominate short-term market attention.
BofA’s broader view on the currency markets includes a forecast for a gradual depreciation of the US dollar across most of the G10 currencies throughout this year and into the next.
The forecast also suggests a slightly greater depreciation for the US dollar against higher-beta G10 currencies.
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