GBP, JPY, CAD Forecast: As we watch some of the biggest movers today and as of recent, check out our forecast on these three forex currencies.
The pound continues to look bullish on most accounts as investors expect a total of 4 rate hikes from the BOE this year after the 15 basis point raise in December. With heavy bearish sentiment by retail traders and COT data, the pair keeps pushing up but is now slowing the pace as the pound-dollar cross is down -0.23% today.
Additionally, fears of Omicron slowing the global economy have staggered the major pairs going into the New Year, but the sterling was able to outpace most currencies with the anticipation of future rate hikes while trying to lock in their 2% inflation target. GBP seems mostly bullish over the yen and loonie for this week’s forecast.
With a near-certain continuation of the decade-long loose monetary policy, investors do not expect the yen to see much demand in the coming months while other major governments attempt to increase their hawkish stances toward the economy and fiat money.
Thus, the negative (-0.1%) interest rate could be starting to look less attractive to banks and financial institutions as other countries are tightening their monetary grips. The yen forecast looks bearish mostly against JPY, GBP, and CAD. But it looks bullish against USD this week.
Driven primarily by oil prices, the Canadian loonie is now slowing down as we start this week. Institution interest has not been very prevalent lately, so big money shifts aren't going to be much of an influence on this currency. An article by Reuters mentioned that the quick rise in demand combined with the harsh cut-back in production has caused "backwardation". This means that global supplies will start to rise again, and this will incentivize producers to sell oil quickly causing the price of oil to drop in the coming months. Overall, CAD's forecast looks strong against the yen, but weaker against GBP and USD.
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