Crédit Agricole Forecast Update: Dollar Depreciation on the Way as Pound Recovers from Deep Undervaluation

Currency markets entered a new stage of flux this year amid heightened uncertainty over the global economic outlook, leading major exchange rates to trade within tight ranges thus far in 2019, although analysts at Credit Agricole are confident that a regime change is on the horizon. 

Currency markets entered a new stage of flux this year amid heightened uncertainty over the global economic outlook, leading major exchange rates to trade within tight ranges thus far in 2019, although the latest CIBC Capital Markets forecasts suggest a regime change is on the horizon. 

The Australian Dollar is still likely to rise this year, according to the latest forecasts from Commonwealth Bank of Australia, although a litany of domestic and international headwinds mean the upside is only limited. 

The U.S. Dollar is in retreat from its 2018 highs and will remain so throughout this year, according to the latest forecasts from MUFG, enabling currencies like the Pound, Euro and Australian Dollar to recover from earlier losses. 

The Dollar will remain the dominant force in the global currency market next year and Pound Sterling will succumb to another dose of 'Brexit uncertainty', according to the latest forecasts from Barclays, while the Euro will reach new lows.

The U.S. Dollar will reverse course and fall in 2019 while Europe's single currency rises from its current lows, according to the latest forecasts from Societe Generale, although the extent of these moves will depend greatly on what happens to China's currency. 

The U.S. Dollar will capitulate to rivals next next year enabling the Pound and Euro to recover from punishing losses wracked up in 2018, according to the latest forecasts from ING Group.  

The U.S. Dollar is entering its final innings as the dominant force in the global foreign exchange market for this cycle, according to forecasts from CIBC Capital Markets, and will soon cede ground to other developed world currencies.