How promising is the outlook for growth and expected returns? This is a critical question that has perhaps been glossed over, or in some instances utterly ignored, over the past six months. However, now that the world’s economy seems to be hitting its stride in the burgeoning recovery; investors are seeing the tempo that the markets can be expected to run more clearly. And, after eight months of solid rally for even the most suspect of assets, it seems investors are ready to take a hard look at current values and measure them up to where conditions will be three, six, twelve months down the road.

EURUSD – Euro Forecast Flips to Bearish Against Dollar
GBPUSD – British Pound Forecast Points to Short-term Pullback
USDJPY – Japanese Yen Likely to Rally Further versus US Dollar
USDCHF – Swiss Franc Outlook Turns Bearish
USDCAD – Canadian Dollar Likely to Pull Back against US Dollar
GBPJPY – British Pound Forecast to Decline versus Japanese Yen

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There is a growing concern among policy officials that the US dollar’s drive to new lows is creating problems. The country’s trade partners have voiced such worries for months now as the already weakened demand among the world’s largest consumer was further depressed by the expense extolled by unfavorable exchange rates. More recent – and pressing – though has been the outcry that the currency’s standing is a side effect of the Fed’s extremely loose monetary policy stance.

Forex options and futures markets paint a decidedly mixed picture for the US Dollar, as traders are increasingly unsure of short-term direction. We had been calling for a major US Dollar turnaround for quite some time now, and the EUR/USD’s sharp initial reversal from $1.50 gave us reason to believe that the Greenback could continue higher.