EUR/USD: To 1.25, USD/JPY: To 100 In The Next Year – SocGen

Sep 1, 2020 at 4:40 AM EDT

The US dollar continues to retreat against the major currencies. What is the outlook for EUR/USD and USD/JPY by end-2020 and end 2021?

Societe Generale Research updated its FX forecasts and now targets EUR/USD and USD/JPY at 1.18 and 105 respectively by end-2020 and at 1.25 and 100 by end-2021.

“Our updated forecasts reflect our concern that EUR/USD in particular, has gone too far too fast, but it seems clear to us that we are at the start of a multi-year period of dollar decline, from very elevated levels,” SocGen notes.

“The yen still can’t fall far and is doing its job: ready to rally if global equities correct, doing little while they go up…A sterling short squeeze has dragged EUR/GBP below 0.90 but we doubt it can hold here for long, even if the outlook is still for the real trade-weighted index to bump along the bottom,” SocGen adds. (FXE, FXB, UDN, FXY)

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