Baku, Azerbaijan, Jan. 15
By Taleh Mursagulov - Trend:
Russia’s Analytical Credit Rating Agency (ACRA) expects weakening of the US dollar exchange rate against the euro to 1.18-1.2 EUR/USD in 2019, Zhannur Ashigali, associate director of the Sovereign Ratings and Forecasting Group at ACRA, told Trend Jan. 15.
“These expectations are based on the fact that by the end of the year the US economy will be less able to support the national currency rate due to the weakening of the effect of fiscal support measures,” said Ashigali.
In addition, the European Central Bank (ECB) is likely to raise the key rate during the year, thereby maintaining interest in the euro, he noted.
“The outlook on the Fed’s policy is somewhat ambiguous due to the dramatic change in the plans of the Fed’s management regarding the number of rate increase episodes (this number decreased from four to three and then to two in 2019 in official statements), which can be associated with pressure from the administration the current US president,” said Ashigali.
He suggested that the Fed base rate during 2019 will be increased twice by 0.25 percentage points.
“This conclusion is based on key expectations regarding the US economy, which include lowering the forecast for economic growth from 2.5 percent to 2.3 percent on the part of the Fed because of the growth of protectionism in the global economy and the completion of the positive effect from reducing the tax burden on the real sector by the President Trump’s administration,” said Ashigali.
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