I
mproved U.S. growth prospects could spark gains for risk assets, like stocks and commodities, while the debt crisis in Europe may get worse before it gets better, according to an outlook presented by FOREX.com, a division of GAIN Capital, in its 1Q 2011 Markets Outlook report.
“The passage of the U.S. tax cut extension and additional stimulus measures paves the way for an improved U.S. outlook, which is a positive for the overall global recovery's prospects. Further, we believe the potential for a “double dip” recession is now over,” said Brian Dolan, chief currency strategist, FOREX.com. “In the Eurozone, problems remain as we head into 2011. So far, the credit crisis in the peripheral nations has not spread to a currency crisis, but this could change if Spain were to require a bailout.”
Other expectations from the FOREX.com 1Q 2011 Markets Outlook include:
- Euro remains vulnerable to on-going impasse between ECB and national governments over debt crisis resolution mechanism
- China’s growth to slow only marginally, with inflation likely to remain elevated
- Australia continues to chug along and the Australian dollar continues to outperform despite the Reserve Bank of Australia staying on hold
- The New Zealand dollar underperforms as the Reserve Bank of New Zealand takes a more dovish stance
- Anticipated higher gold and silver prices; in particular, XAU/EUR to reach new all-time highs
- Improved demand and tightening supply likely to push crude oil prices higher
The FOREX.com research team highlights potential technical levels for key pairs, such as EUR/USD, GBP/USD, USD/JPY, USD/CAD, and AUD/USD. Key cross-currency pairs like EUR/JPY and EUR/GBP are also covered.
The FOREX.com Markets Outlook provides commentary and market forecasts with its view of the direction of the world’s major currencies as well as key commodities including gold, silver and oil. The report is prepared by Mr. Dolan, Research Director Kathleen Brooks and Senior Technical Strategists Daniel Hwang, Chris Tevere and Eric Viloria.
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