Via a Barclays note, analysts are looking for a small decline in the US dollar over the year ahead, citing "our views of a stable backdrop for risk and commodities alongside moderate USD overvaluation."
But says there are topside risks for the dollar, pointing to potential persistence in ongoing disruptions:
- China slowdown
- supply bottlenecks
- the energy crunch
which could all provide a tailwind to 'safe haven dollar demand'.
On central banks, sees markets repricing the risks for other central banks catching up towards Fed hawkishness.
Forecasts for EUR/USD, the analysts 'see room for modest appreciation of the euro driven by relative monetary policy expectations"
- Q4 2021 1.15
- Q1 2022 1.16
- Q2 2022 1.18
- Q3 2022 1.19
- Q4 2022 1.19
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EUR/USD weekly candles:
