FOREX.com Q2 2013 Outlook: Mirror, mirror on the wall - the US dollar is the
fairest of them all…
LONDON, NEW YORK and SYDNEY, March 19, 2013
LONDON, NEW YORK and SYDNEY, March 19, 2013 /PRNewswire/ -- FOREX.com, the
retail division of GAIN Capital Holdings, Inc. (NYSE:GCAP), a global provider
of online trading services; today released its Q2 2013 Market Outlook report.
The full FOREX.com Q2 2013 Markets Outlook Report is now available at
www.forex.com/uk under Market Analysis.
FOREX.com analysts predict that the dollar could be the star of the FX world
this quarter as strengthening US economic data helps the greenback to become
the growth currency of choice.
A strong dollar offers lots of opportunities in the FX world including an
extension of USDJPY strength and GBPUSD weakness during Q2. It could also make
life harder for the Aussie dollar, which is struggling under the dual pressure
of lacklustre growth at home and in China.
Stocks could also extend their gains this quarter, although investors may
start to focus on value. US stock markets including the Dow and the SPX 500
reached record highs in Q1; this quarter we could see the Hang Seng, the
German Dax index and the Eurostoxx 50 start to catch up with their US
counterparts. The next few months could be the sweet spot for US markets,
according to FOREX.com, as the Fed keeps monetary policy loose and the economy
continues to pick up. But things may start to sour as we get closer to Q3, as
fears about the end of quantitative easing start to grip markets.
In the UK, a triple-dip recession is likely to keep pressure on the pound,
which could fall to its lowest level since the Financial Crisis in 2009.
FOREX.com analysts believe this quarter will be pivotal for the Eurozone as
the periphery becomes more vocal in its opposition to austerity, Italian
political worries come back to the surface and Cyprus continues to dominate
the headlines. This could weigh on the euro and, if the sovereign crisis kicks
off once again, it may cause global volatility levels to spike.
"We are most excited about a potential shift in the dollar, from being a safe
haven to a growth currency. We expect the USDJPY uptrend to continue, although
this quarter the dominating factor is expected to be developments in the US
and at the Fed, rather than at the Bank of Japan. We think USDJPY could get to
100.00. In Q2, we also expect EURUSD to grind back to the mid 1.20's as a
bullish case for the euro gets harder to justify." said Kathleen Brooks,
Research Director, FOREX.com.
Ms Brooks added: "Although there are risks, particularly in Europe, the global
growth outlook will be supported by a continued recovery in Japan and the US,
which is supportive of risk assets. But investors need to be on their guard as
signs that Italy is being sucked into the sovereign crisis or a slowdown in
China, could cause volatility to spike in the coming months."
Expectations from the FOREX.com Q2 2013 Markets Outlook include:
*The FTSE is likely to buck the trend in the UK economy and follow its US
*Relative valuations could help the German Dax out-perform the Dow Jones
*Gold bugs continue to be thwarted by the Goldilocks situation in the US –
not too hot, nor too cold. This is likely to keep the yellow metal range
bound as global inflation pressures remain contained
*With gold treading water, copper is our commodity to watch, as we expect
it to overtake the gold/silver ratio as a barometer for global economic
*We predict the pound is the ultimate loser this quarter as long-term
growth fears limit any recovery in sterling
*China's uneven recovery could limit Aussie strength as its mining sector
reaches its peak
*The spread between UK and US oil is expected to narrow further as US
energy demands continue to be met at home
The FOREX.com Markets Outlook report highlights potential price ranges for key
pairs, such as EUR/USD , GBP/USD , USD/JPY , EUR/GBP and USD/RUB . Major
foreign equity markets; key commodities including gold, silver, oil and
agriculture are also covered.
The FOREX.com Markets Outlook report is prepared by Research Director Kathleen
Brooks, Senior Technical Strategists Chris Tevere, CMT, Eric Viloria, CMT, and
Research Analyst Chris Tedder.
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