In order to curb inflation, the U.S. Federal Reserve will take the lead in rising interest rates. Liu Jiahao, head of the investment strategy department of the Wealth Management Division of Standard Chartered Bank, said that as global inflation slows down, the Fed is expected to stop raising interest rates in the first half of this year (2023). And it is not ruled out that the monetary policy will change from tightening to loose before the end of the year. It is estimated that the US dollar will reach its peak in the first quarter, and the yen against the US dollar is expected to see 120 yuan.
Standard Chartered Bank held a 2023 investment outlook press conference today (4). Liu Jiahao said that it is expected that the Federal Reserve will continue to raise interest rates in the first quarter of this year, and the U.S. dollar index will continue to fluctuate at a high level in the next 1 to 3 months. Risks are slowing down and there is less demand for hedging, which is bound to weaken the dollar’s interest rate advantage.
Liu Jiahao believes that the U.S. dollar will continue to fluctuate at a high level within 3 months in the short term, but from a long-term perspective, it is estimated that the U.S. dollar index will fall by about 4% to 5% this year in the next 6 to 12 months.
Compared with the possible weakening of the U.S. dollar, Standard Chartered is optimistic that the yen and the euro will be the beneficiaries of the depreciation of the U.S. dollar. As for the commodity currencies including the Australian dollar, New Zealand dollar, and Canadian dollar, they may rise slightly, but due to the limited increase in commodity prices, they may Inhibit exchange rate performance; In addition, Asian currencies may also rise slightly.
Liu Jiahao pointed out that the yen had been consolidating around 127 against the U.S. dollar. After the Bank of Japan adjusted the yield curve policy last year, the market interpreted this as an actual interest rate hike. The yuan against the US dollar does not rule out moving towards the 120 yuan mark.
In terms of gold, Standard Chartered Bank predicts that gold will maintain a sideways trend in the first quarter, but as the Fed may end raising interest rates and the focus turns to the risk of economic recession, gold’s safe-haven characteristics may be re-emerged by the market Favored, it is expected that the price of gold may challenge $1,890 in the next 12 months.
In addition, the economic slowdown may weaken the demand for crude oil. It is expected that the OPEC+ organization of oil-producing countries will maintain production capacity discipline to stabilize oil prices. A barrel is around $75, but if geopolitics leads to tight supply and demand, or if China’s economic recovery is stronger than expected, it may also put upward pressure on oil prices.