Home »Top Stories » Big banks back off calls for euro-dollar parity
US bank Citi has abandoned its prediction of a fall for the euro to below parity against the dollar, the latest major lender to capitulate on long-term forecasts for a historic change in one of the world's big currency equilibriums. The shift, sent to clients in a strategy note late on Friday, follows revisions by other major dollar bulls including Deutsche Bank, who last week again pushed out their timetable for a fall to $0.95 for the euro.

Reuters historic polling data shows all of the currency world's top ten banks have now been forced substantially to back off the forecasts of a swift drop below parity which have been widespread since the dollar rallied strongly in late 2014. Barclays and Morgan Stanley analysts have both raised their 1-year forecast to 99 cents from 95 cents while other dollar bulls including Bank of America Merrill Lynch, BNP Paribas and Goldman Sachs are at $1 or above. J.P. Morgan has the euro at $1.15 at year's end, while HSBC's David Bloom has been forecasting a bounce to $1.10 or beyond for months. Cutting a number of its forecasts for the dollar, analysts from Citi, the world's largest currency trader, raised its target for the euro over the next 6 months from $0.98 to $1.04.

the author