None of the leading FX forecasters see the Euro imploding, in fact JPMorgan see it finishing at 1.35 v the dollar..
The 17-nation currency lost 2 percent after erasing a gain for the year as recently as November. The most-bearish forecaster sees the euro at $1.17, while the most optimistic call is for a rally to $1.45 by mid-year. The median of the 40 estimates is $1.30 by 2013.
Predictions
Wells Fargo – $1.24
Nick Bennenbroek, who is the head of currency strategy at Wells Fargo & Co. topped the list for the third time in five quarters as measured by Bloomberg Rankings. He expects the euro to drop in the first six months to $1.24, from $1.2961 at the end of 2011
The European Central Bank will continue to ease aggressively in 2012 as recession approaches in Europe and the U.S. numbers remain resilient. All the fundamentals strongly argue for euro weakness.
Westpac $1.20
Westpac Banking Corp. have the second-lowest margin of error for two consecutive surveys, they predict $1.20, as measures by the European Central Bank fail to keep the region’s sovereign-debt crisis from worsening.
Even with a euro forecast that bounced from $1.37 to $1.24 in 2011, Bennenbroek and Wells Fargo senior strategist Vassili Serebriakov’s belief in the superior U.S. growth gained them the best overall margin of error of 3.98 percent across 13 currency pairs in the six quarters ended Dec. 31.
Overseas Chinese Banking – $1.35
Oversea-Chinese Banking was the fourth-most accurate forecaster for the second consecutive quarter and had the second-lowest margin of error on the euro versus the dollar. It expects the euro to strengthen to $1.35 by the year end.
National Australian Bank – $1.25
National Australian Bank forecasts the euro ending the current quarter at $1.25. Rob Henderson, chief economist for markets at fifth-ranked National Australia Bank, said by phone from Sydney on Jan. 5;
The differential between the economic performance of the U.S. and Europe will contribute to some negativity on the European currency. We also expect that the ECB will in one way or another be running looser monetary policy whereas the Fed is pretty comfortable at the moment with keeping policy where it is, so that’s another negative for the Europeans.
J P Morgan – $1.34
John Normand, the London-based global head of currency strategy at JPMorgan. Normand, expects the euro to gain to $1.34 by the end of the second quarter.
The ECB will not make a bargain explicit, but we suspect they will increase debt purchases if reform legislation is implemented. Coupled with lower interest rates the euro should stabilise, then rebound.
