ABN Amro expects euro to become much stronger

ABN Amro has revised the estimate of the euro-dollar rate upwards. The bank expects the euro to become even stronger due to the phasing out of the ECB's buying program.  

The bank has the year-end forecast of the course increased to 1,20. It was previously thought that the euro would be worth about $2017 at the end of 1,15.

Value also increases
The bank also foresees that the euro will appreciate in value in 2018. The year-end forecast for 2018 has therefore been increased from 1,20 to 1,30. Despite the slow pace of the phasing out of the ECB's support program, it does provide the euro with the necessary support.

The euro-pound rate
According to the bank, the reason that the pound is strengthening against the dollar is mainly due to the dollar weakness. This trend is likely to continue for the foreseeable future.

With regard to the euro-pound rate, the bank is cautious in forecasts. Due to the Brexit negotiations, the course could go either way.

Possible interest rate hike 
In addition, it is a realistic scenario that the British central bank will raise interest rates because of the relatively high inflation in Great Britain. On balance, the bank expects the euro-pound rate to remain more or less the same. The price is now moving around 0,88. 

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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