This sharp fall in gas and electricity prices benefits the economy overall and should mean the region can avoid the harsh recession that was expected. Title Transfer Facility (TTF) gas prices, the key benchmark for gas prices in Europe, have collapsed to pre-invasion lows as the continent experiences the warmest weather on record. A few months on, each of the motivating factors for this downbeat view has been challenged, if not reversed outright. “In our view, the top trading themes for 2023 are regional growth rotation away from the U.S., at least temporarily toward China, and greater differentiation with high beta FX.”īack in November 2022, J.P. Morgan Research took a dim view of the euro, with euro/dollar forecast to hover around 0.95-1.00 in 2023. exceptionalism seems to point toward a period at the trough of the dollar smile, whose duration is uncertain,” said Chandan. “We still hold longer-term reservations about the broader trajectory of the global cycle, which we think should be generally dollar-positive, but the interim period of both positive global surprises and less U.S. Overall, while J.P. Morgan Research still forecasts modest dollar strength in 2023, it is taking a neutral stance on the USD. Markets are now aggressively pricing Fed easing on the back of growing signs of disinflation, while the outlook for global growth this year is no longer looking as pessimistic as it did earlier in 2022,” said Meera Chandan, Global FX Strategist at J.P. Morgan. “The confluence of factors that had proved so supportive of the dollar earlier in 2022 has since inverted. Such weakness reflects a mean reversion from the dollar’s outsized gains in 2022. FX Publications Inc is a subsidiary of IG US Holdings, Inc (a company registered in Delaware under number 4456365).After a historic bull run last year, the nominal broad dollar index fell almost 7% between November 2022 and January 2023. Registered Address: 251 Little Falls Drive, Wilmington, DE 19808. FXP is not responsible for any trading decisions taken by persons not intended to view this material. ![]() Any examples given are provided for illustrative purposes only and no representation is being made that any person will, or is likely to, achieve profits or losses similar to those examples. ![]() It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice. This information is made available for informational purposes only. Information presented by FXP should be construed as market commentary, merely observing economical, political and market conditions. residents or individuals domiciled in the U.S. Any and all information provided by FXP is not intended for use by U.S. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.įX Publications Inc., abbreviated herein as FXP, (d.b.a DailyFX) is no longer a registered Introducing Broker with the Commodity Futures Trading Commission and is no longer a Member of the National Futures Association in the U.S. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors.
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