Intesa Sanpaolo's monthly Forex G10 traces the performance of the major world currencies in the first few months of 2013: a year that began under the aegis of a widespread euphoria among the various asset classes, resulting from a favorable combination of positive signals on global growth and from the return of specific risk aversion towards the euro area.
In particular, a large and protracted strengthening of the US dollar began, while the "return of specific risk aversion" factor favored a large, but short-lived, strengthening of the euro, which, after a January rise, entered, between February and March, in a corrective phase, while the dollar continued its run, driven by improvements in the current and future economy.
The strengthening of the dollar should continue, at different rates, also in the rest of the year, above all in view of the future reduction of quantitative easing, which however risks being the antechamber of the start of a cycle of rate hikes.
Dollar growing, therefore, also by virtue of the fact that the current level remains rather low compared to historical averages. As regards the other major currencies, the euro, as mentioned, has readjusted after an expansive phase. In the coming months, in the light of the conflicting data coming from the various economies of the Eurozone, it should fluctuate in the range between 1,25 and 1,35 dollars, while the pound, after the recent decline, should recover, and the yen is destined to continue on the back of a slight depreciation.
Attachments: MonthlyForexG10-28March2013.pdf
