Forecasts for the US dollar change all the time, affected by news events and relative sentiment towards the US economy. This continually updated article reviews the latest forecasts from banks and FX experts as well as news and recent movements of USD in the currency markets.
What’s in this US dollar forecast summary?
According to OFX the USD trend for October is unclear.
Starting October with a decidedly risk-off sentiment, the DXY (US dollar index) was testing upper levels around 94.26. If it can stay above that level in October, this could open the door towards 97.85. Should conditions shift, it might see decreased demand and fall back towards important support around 90.00.
As we progress through 2021, the US dollar is being buffeted by predictions of rising interest rates, inflation and the oil price as the world starts the slow path to recovery from the pandemic.
Rabobank told Bloomberg News that they see the US Dollar strengthening against many currencies this year as inflation picks up maybe leading to higher interest rates in the US, the so called ‘reflation’ trade.
You can also read our full Foreign Exchange Guide to the United states.
The US dollar is the most popular reserve currency so whether the USD rises or falls in the future is a difficult question and the answer depends on many factors.
A good way to consider the US dollar’s current relative value is to look at the recent US Dollar Index which measures the USD value against a range of peer currencies.
The following sections show a summary of trends and forecasts for popular US dollar exchange cross rates:
In September, Olaf Scholz’s Social Democrat Party narrowly won the German election. The longer negotiations and political uncertainty drag on, the greater downward pressure will be felt by the euro.
In addition should risk sentiment remain fragile, there could be continued demand for USD as a safe haven. Therefore, USD/EUR could gain higher.USD-EUR Outlook
In early September, AUD broke 0.74 USD, however due to erosion in risk sentiment sparked by the Evergrande crisis, then steadily declined toward 0.72 USD.
Despite the pessimistic outlook there OFX see an opportunity should there be any uptick in global risk sentiment, accelerating a broader AUD rebound towards 0.75 USD.AUD-USD Outlook
Into October, broader risk sentiment is driving direction for commodity currencies like the loonie. If the global equity volatility eases, we could see domestic data take the front seat in driving the currency direction.
OFX predict the USDCAD pair could trade between 1.24 – 1.29 CAD in October.USD-CAD Outlook
The pound sunk in September to 1.34 against the greenback but has recovered into October near 1.36 after Boris called the army out to drive the fuel trucks.
The outlook for the pound for October is very uncertain due to rising inflation, slowing growth and unemployment, the combination of which could create a nightmare scenario for the Bank of England Monetary Policy Committee.
OFX predict the GBP could range between 1.33 – 1.38 USD in October.GBP-USD Outlook
The US dollar surged to 6-Month Highs against the Mexican peso in October as as bond yields have risen sharply on predictions the US Fed will start tapering (cutting back on Bond purchases).
But the peso was not alone as most other Latin American currencies dropped as the dollar strengthened.USD-MXN Outlook
The rupee weakness in September has continued into October dropping from 73 to 75 per USD, after powering ahead in late August gaining almost 2% as speculation grew that the central bank was relaxing its control over the currency. USD-INR Outlook
In September, the JPY traded within recent ranges of 109 – 111 JPY until the last week of the month.
Continued market volatility could support a lower USDJPY in October and the expectation that potential Prime Minister Kishida will maintain current monetary policy could also pressure the yen lower.USD-JPY Outlook
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