Strongly contrasting predictions for the dollar/yen exchange rate were issued this morning by Deutsche Bank and Saxo Bank, two banks with busy FX trading businesses.
Saxo likes to make 10 “outrageous claims” in its annual markets outlook – one of them this year is that the dollar will strengthen from ¥89.30 at present to ¥110.
“Although the downtrend in the USD is rooted in irresponsible fiscal and monetary policies,” the bank commented, “we believe that the USD might snap back at some point in 2010, because the USD carry trade has been too easy and obvious for too long.”
The...