Research Detail
| 2023/06/15 / Erste Group Research |
Euro should strengthen The euro has remained in a sideways movement against the dollar in recent months. We expect the dollar to weaken in the second half of the year. The reason is that we expect a slowdown in economic activity and inflation in the US. This should give the markets certainty that there will be no further interest rate hikes and trigger speculation on interest rate cuts in the US. The yen is in a weakening phase against the euro, due to the Bank of Japan's control of the yield level of 10-year Japanese government bonds. In contrast, German 10-year government bonds are currently comparatively attractively priced with a yield level of around 2.4%. Since the core inflation of both currency areas is currently close to each other, there is a lot to be said for the euro from a fundamental point of view. The franc has been moving in a narrow trading range between 0.97 and 0.98 over the last few weeks. From a fundamental perspective, the franc continues to benefit from a significantly lower inflation level compared to the Eurozone (2.2% y/y vs. 6.1% y/y in May), while the current interest rate differential is only slightly in favor of the euro. |
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General information
| Author | Erste Group Research |
| Date | 2023/06/15 |
| Language |  |
| Product name | Forex News |
| Topic in focus | FX, Macro/ Fixed income |
| Economy in focus | Japan, Switzerland, United States |
| Currency in focus | Swiss Franc, US Dollar |
| Sector in focus | - |
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