Compared with other asset markets and, in particular, commodities, movements in G10 FX since the Russian invasion of Ukraine have been more contained. That said, the emerging patterns reflect the urgency and disruption that the war has created. Consequently, economists at Rabobank have brought forward their targets for AUD/USD, slashed their one-month forecasts for EUR/USD and EUR/CHF and lowered the expectations for EUR/GBP. 

Euro to remain under pressure

“Although the market has pared back its expectations of RBA rate hikes this year in reflection of the Ukraine crisis, investors are still looking for lift-off in the latter part of this year. We have brought forward our 0.74 target for AUD/USD to a three-month view from year-end.”

“We have revised our EUR/USD target sharply lower to 1.06 on a one-month view, though there is scope for stabilisation around 1.08 in three-month. In step with this, we have also lowered our expectations for EUR/CHF to 0.98 on a one-month view.”

“Since the UK’s energy supplies are more diversified than Germany’s we expect GBP to remain moderately more resilient than the EUR and have also adjusted our EUR/GBP forecasts lower to 0.81 on a one-month view.”