Our new DailyFX Interest Rate outlook report will be a perfect complement to our forex forecasts, as we have seen a strong historical relationship between currency rates and their attached interest rates. In fact, interest rates explain a good deal of the recent US dollar recovery; a clear shift in interest rate forecasts out of the US Federal Reserve has gone a long way to improve the dollar’s stance against major forex counterparts.
Given that interest rates markets are the most liquidly traded in the world, we can easily find dependable interest rate instruments that show us exactly where market expect currency yields to go through the short and medium term. These rate forecasts in turn give us a much clearer fundamental bias for major currencies and clarify outlook for forex pairs. Read below to see our expectations for the US Dollar, Euro, British Pound, Japanese Yen, Canadian Dollar, Swiss Franc, Australian Dollar, and New Zealand Dollar.
US Dollar Interest Rate Outlook: Bullish
Euro Interest Rate Outlook: Bearish
British Pound Interest Rate Outlook: Bearish
Japanese Yen Interest Rate Outlook: Neutral
Swiss Franc Interest Rate Outlook: Neutral
Canadian Dollar Interest Rate Outlook: Bearish
Australian Dollar Interest Rate Outlook: Bearish
New Zealand Dollar Interest Rate Outlook: Bearish
Written by David Rodriguez, Quantitative Analyst for DailyFX.com
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The information contained herein is derived from sources we believe to be reliable, but of which we have not independently verified. FOREX CAPITAL MARKETS, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon this information. FOREX CAPITAL MARKETS, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. FOREX CAPITAL MARKETS, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.
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