Westpac have a very detailed piece ou outlining their forecasts for major currencies against the USD.


  • USD/JPY 115 at end-2023
  • Euro no peaks at USD1.23 in March 2023
  • GBP/USD 1.45 in mid-to-late 2022
  • USD/CAD 1.18 at the end of 2022

Westpac, in very brief, citing:

  • we have brought forward both the timing of the FOMC's taper and rate hikes signals ... US monetary policy will be more supportive of the US dollar
  • Bank of Japan is likely to deviate most from the FOMC ... there is not and will not be a reason for the Bank of Japan to pull back on policy accommodation let alone tighten policy for the foreseeable future.
  • The ECB is next in the hierarchy of least-to-most likely to act like the FOMC.
  • Bank of England and Bank of Canada face very different circumstances ... Bank of England's asset purchase program has a defined limit of GBP895bn which is fast approaching, while the Bank of Canada has already twice tapered its weekly purchases. In a very similar vein to the FOMC, both the Bank of England and Canada expect inflation to be at or near target in 2022 and beyond, warranting lift off from the lower bound
  • Relative growth dynamics and risk sentiment also need to be factored into our analysis.

Its very difficult to argue with any of this IMO.