Outlook for USD, Pound, Yen and Euro remains uncertain

Inflation and recession risk continue to weigh on currency markets

The USD has been declining in the week ending 12 August 2022 but staged a rebound against the Euro, Yen, and Pound on Friday, reports Reuters. There remains a significant probability of a 75bp hike in interest rates by the Fed in September to combat stubborn inflation, though a 50bp rise is considered more likely..

The $ appreciated on Friday against the Pound ($1.2141) and against the Euro ($1.02625) and against the Yen (Yen133.495).

If Commerzbank is right, there are costly times ahead for European businesses importing from the US (and paying in $).  The bank has forecast the Euro will depreciate to $0.98 by December 2022.  A year earlier the rate had been $1.18318 according to OFX

On a $10000 import, that means an extra €1,753 to pay just to convert the currency.

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