Kit Juckes, Chief Global FX Strategist at Société Générale, analyzes EUR/USD and USD/JPY outlooks on three scenarios
Hard, soft, or no landing at all?
The base case assumption, which assumes a mild US recession in the middle of next year, looks for 10-year Treasury yields to fall to 3.7% by the middle of next year.
USD/JPY could be just below 150 in mid-2024 on a US no landing, below 130 on a hard landing and just below 140 on our base case.
Our rates forecasts imply EUR/USD reaching 1.15 by mid-2024 on our base case for the economic outlook (mild recession), and 1.02 on the ‘no-recession’ forecast. A hard landing clouds the outlook because the initial reaction is for the relationship between EUR/USD and interest rates to break down, temporarily.
Source: https://www.fxstreet.com/news/usd-jpy-could-be-just-below-150-in-mid-2024-on-a-us-no-landing-socgen-202310061301