Monthly Forecast: April

A monthly commentary/summary that discusses our broader, long-term currency analysis.

April 2019 Share this story: Andrew Kositkun Foreign Exchange Analyst USD After taking a dovish turn in January, the Fed doubled down on its dovish pivot in March by downgrading its economic outlook, removing all projected rate hikes for 2019 and tapering its balance sheet normalization plan that will ultimately end in September this year with the balance sheet at the high end of its projected range. Read more... EUR The big development for the euro, since our last currency update, has been the more-dovish-than-expected change from the ECB. At its most recent meeting, the ECB pushed back rate hike guidance from this summer towards the end of 2019. Moreover, several members appear to be in favor of a longer delay than the bank ultimately signaled. The central bank also took down its GDP and inflation forecasts as well as launched additional easing measures. Read more... GBP The GBP has proven to be a difficult currency to forecast given the drastic differences of possible outcomes combined with the fluid nature which makes it difficult to handicap the probability for each Brexit possibility. But, to be honest, the business end of Brexit has always had the potential to be chaotic both from a political and market point of view. Read more... JPY After a period of sharp appreciation in December 2018, the JPY has spent 2019 steadily depreciating despite US 10 year yields moving down during the same period. In our view, this was driven by two key factors. Read more... CAD A key development for the CAD since our last outlook was the Bank of Canada (BoC) joining other DM central banks in adopting a dovish outlook. At the BoC's March meeting, the bank, for the first time since the start of the current rate normalization cycle, did not judge current or future rate hikes to be warranted. Instead, the BoC adopted a neutral stance and stated that it believed the economic outlook warranted a policy interest rate that was below its neutral range. Read more... AUD The Reserve Bank of Australia (RBA) has joined the ranks for dovish DM central banks. As a result, markets have materially increased the probability of a rate cut this year, with some analysts calling for 2 cuts in 2019. This pivot marks a significant change from the "glass half-full" view that the RBA had and a ~40% chance for a hike only a couple months earlier. Read more... Read More If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos! Follow City National Bank on social media: Non-deposit investment products: • Are not FDIC insured, • Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and • Are subject to investment risks, including possible loss of the principal invested. This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting. Unsubscribe from this list  |  Update email preferences This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list. Copyright ©2019 City National Bank – All Rights Reserved. 350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071 City National Bank is a subsidiary of Royal Bank of Canada. TERMS & CONDITIONS  |  PRIVACY STATEMENT NMLSR ID# 536994 | City National Bank Member FDIC