Scattered dollar forecasts create unrest
Analyst forecasts about the US dollar are the most scattered they have been in two years and are creating higher volatility.
The ability of analysts to forecast the dollar in such a volatile market has made it nearly impossible to see where results may end up. The forecasts predicted by Bloomberg's strategist survey have a 39-cent gap between the high and low calls, which is almost double the August 2007's divide.
The cluster of predictions and foresight is driving up foreign exchange price swings and increasing risks that trading strategies will backfire. Wider fluctuations also increase the risk for carry trades, where money borrowed from countries with low rates is used to invest for higher yields. The higher risk will most likely drive down currencies like the Brazilian real, South African rand, and many more.
The foreign exchange rate of the US dollar is currently at GBP1.646 and EUR1.386.
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The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.