Economic Calendar

Tuesday, July 21, 2009

Dollar May Weaken Against Euro, Yen, Citigroup Says

Share this history on :

By Candice Zachariahs

July 21 (Bloomberg) -- The U.S. dollar may weaken against the euro, the yen and the Australian dollar as global sentiment turns against the greenback, according to Citigroup Inc.

The euro may extend this month’s gains versus the dollar as buying by sovereign wealth managers and central banks bolsters the 16-nation currency, Citigroup said in a monthly note on its foreign-exchange forecasts. The yen may strengthen against the dollar as Japan’s economy begins to rebound, attracting investors to the Asian nation’s assets, the bank said.

“We detect evidence that underlying sentiment remains U.S. dollar negative,” Citigroup analysts including Jeremy Hale, London-based head of macro strategy, wrote in the note to clients yesterday.

The euro will climb to $1.43 in three months and reach $1.45 in six to 12 months, Citigroup said in the note. The yen will rise to 93 per dollar in three months and strengthen to 90 in six to 12 months, the company said.

The dollar traded at $1.4200 per euro and 93.94 yen as of 8:28 a.m. in London.

The Australian dollar is likely to lead gains among so- called commodity currencies, the analysts wrote.

Australia’s currency will advance to 83 U.S. cents in six to 12 months and New Zealand’s currency will rise to 66 cents, the company said. The so-called Aussie traded at 81.21 U.S. cents and New Zealand’s dollar was at 65.30 cents.

To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net




No comments: