BofA cuts USD/JPY forecast, sees end-2025 target at 155

Published 24/04/2025, 11:28
© Reuters.

Investing.com -- Bank of America (BofA) analysts revised their currency forecasts, indicating a lowered outlook for the USD/JPY exchange rate, while still expecting medium-term upside with an end-2025 forecast of 155. Additionally, they made modest adjustments to their EUR/GBP profile, nudging it up slightly to 0.82 from 0.80 for the year-end forecast. Despite these changes, the GBP/USD forecast remains largely unchanged at 1.43.

The analysts also revised their EUR/CHF profile downward, while leaving direct EUR-Scandies forecasts untouched. In the Dollar Bloc, the USD/CAD profile is maintained, but there have been revisions to the Australian and New Zealand dollar forecasts, reflecting smaller adjustments in anticipation of currency movements.

BofA highlighted risks to their forecast as being "tilted to the downside," noting that the USD could depreciate more quickly if trade negotiations falter. Conversely, they acknowledged that upside risks for the USD could emerge from a de-escalation in the trade war and a renewed focus on pro-growth economic policies in the United States. However, they don’t expect any resultant USD risk premium to dissipate soon.

The analysts also identified several factors that could influence the EUR/USD exchange rate. Upside risks include increased fiscal spending in Germany or the EU, as well as lower energy prices potentially resulting from a peace deal in Ukraine. On the downside, failure to advance EU reforms or an escalation in EU tariffs could negatively impact the currency pair. Additionally, a return to "US exceptionalism" is seen as a potential downside risk.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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