Exchange rate forecasts from Bank of America predict a weaker British pound and US dollar
BofA analyst Athanasios Vamvakidis says his team has connected the dots of their various FX research publications and analytical tools to deliver a more accessible exchange rate forecast for clients.
The below calls are valid for a one-month horizon.
The main results suggest being long EUR, CHF, AUD and NZD, and short USD and GBP.
The analysis is neutral on JPY, CAD, NOK and SEK.
Forecast for the British pound
"Short GBP is supported by fundamentals, both our last month’s and last week’s flows, technicals and a loose monetary policy. The only positive factor includes trend and positioning quant indicators," says Vamvakidis.
Euro dollar exchange rate forecast
According to Vamvakidis the strongest signals are for long EUR/USD:
"Long EUR is supported by our quant model, trend and positioning quant indicators, fundamentals, technicals and a tight monetary policy.
"None of our determinants point toward Euro weakness at this point."
Swiss Franc forecast
"Long CHF is supported by trend and positioning quant indicators, both our last month’s and last week’s flows, technicals and relative data surprises. The only negative factors include our quant model and a loose monetary policy," says Vamvakidis.
Australian dollar forecast
According to BofA, a bullish forecast on the Australian dollar is supported by their quant model, trend and positioning quant indicators, fundamentals, last month’s flows, and technicals.
"The only negative factors include relative data surprises and loose monetary policy," warns Vamvakidis.
New Zealand dollar forecast
A long NZ Dollar call is supported by BofA's quant model, trend and positioning quant indicators, technicals and a tight monetary policy.
"The only negative factor includes relative data surprises."
US dollar forecast
"Short USD is supported by our quant model, trend and positioning quant indicators, fundamentals, both our last month’s and last week’s flows, and technicals. None of our determinants points toward USD strength at this point," says Vamvakidis.