Sticking with the currency theme, I have a very strong view that the Euro will fall sharply this year.
Of course, the currency had already fallen a decent amount towards the end of 2014, but I think it's almost a sure thing to continue and my own call is for the decline to be more severe than most are forecasting.
It's a "heads you lose, tails I win" scenario as far as I can tell. I have long been bearish on the Euro since I think we will see a serious re-escalation of a Euro crisis and I think that should logically see the Euro fall (admittedly the one thing does not guarantee the other). I have never really been "pro" the single currency although I have to concede it has been dramatically more successful than I thought possible.
One of the reasons I think the Euro will run into crisis mode is that I simply cannot see how QE is supposed to work. And I revert to my theme that central banks are out of options.
However, if it DOES work, then the very aim of the policy is to weaken the Euro.
Meanwhile, the dollar is rampant, and the momentum in markets favours a further weakening.
All-around, the only problem is that most people agree the Euro is likely to fall and of course markets love to confound the consensus. However, that reservation is not nearly enough to put me off from forecasting a severe move lower.
EUR = USD 1.15 seems to be a popular prediction. I think that is far too cautious. I said 1.05 in a straw poll conducted by a broker pre-Xmas. Even then, I was pulling my punches slightly - I would think parity is within reach.
I am mainly thinking of the Euro vs the US Dollar, but of course I expect declines against all currencies. I especially feel the existing decline in the Yen is overdone, so I would expect a double-whammy in EUR/JPY
Call - the Euro currency to fall sharply against other major currencies in 2015
Prediction - EUR/USD to fall to 1.05
Trade - short EUR/USD or EUR/JPY
Conviction - Very high
Feasibility - High
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