The foreign exchange experts of the Swiss bank specializing in private banking, Lombard Odier, published an overview of the dollar. In their estimation, the dollar is on the weakening trend – “We expect that the dollar will weaken in the coming months due to a number of factors, including faster than expected growth in China, the decrease in the risks of the gas crisis and the slowing of the rate of tightening The Fed’s monetary policy.
“The decline in the value of the dollar relative to the euro should continue, especially during the first half of 2023. We believe that the euro-dollar ratio will stand at $1.10 per euro during the next three months, and will reach $1.12 per euro within a year.
“At this time, Europe’s trade conditions are improving, and there are high chances that, contrary to market expectations in recent weeks, renewing the bloc’s gas supply inventory will not be so complex. If the current trends continue, it is possible that European countries will end this winter with 50% of their gas supply inventory , higher than the average of the last five years which is only 32%.
“Meanwhile, the growth sentiment of the Eurozone is improving from the low levels it was at, the opposite of the dynamics of 2022.” This means that Europe is improving, contrary to expectations. It is also related to the fact that the winter was not as catastrophic as they thought. The estimates spoke of a very large shortage of gas following the war. It turned out that there would be a large surplus. The preparations were good, the winter was not extreme either, so it was possible to deal with it. Europe is strong, that means the euro is strong, that means that the currency is relatively stronger in relation to the dollar.
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