Latest FX forecasts from Citi

Citi say that uncertainty around the US presidential elections could raise the risk premia for USD assets and expected flows.

Here's their latest 0-3 & 6-12 month forecasts;

  • EURUSD 1.10 0-3m, 1.15 6-12m

  • GBPUSD 1.25 0-3m, 1.28 6-12m

  • USDJPY 106 0-3m, 105 6-12m

  • NZDUSD 0.69 0-3m, 0.70 6-12m

  • AUDUSD 0.77 0-3m, 0.78 6-12m

They expect the BOJ to cuts rates further into the negative by 20bps and increase ETF buying to ¥5.6tn. They says the long-term fair value for USDJPY is around 83.00 as the overshoot from short-term differentials unwind. They see it drifting towards 100 or lower longer-tern.