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Forecast for 2008 Forex, Oil, Interest Rates

December 30, 2007 (Last updated on September 10, 2018) by

OK, the New Year is coming close and as this year is ending it’s about time to try to forecast the future of the Forex market (and some other factors that influence Forex) for the year 2008. My last forecast (for 2007) didn’t get its own post on this blog, but I must admit that it was a disastrous attempt — I thought that dollar will start to grow and it lost more than 10% against euro, I also predicted for the oil to remain below $65/barrel and it got beyond $90/barrel.

By posting my forecast to this blog I can be sure that I will be able to compare actual results with my thoughts exactly as they were. And maybe it will help some long-term traders too.

So here it is, 2008 forecast:

EUR/USD — ~4% down to about 1.4100.
GBP/USD — ~4.3% down to about 1.9100.
USD/JPY — ~9.6% down to about 101.50.
EUR/JPY — ~10% down to about 148.80.

Oil — it’s hard for me to predict this one, but judging from the outlook on growing dollar, it should remain in the $80-$120/barrel boundaries for the whole 2008. Yeah, that’s a huge range, but oil is really volatile.

Interest rates:
Fed is more likely to lower the interest rate by 1%-1.5% next year (2.75%-3.25% by the end of the year).
ECB will most probably be lowering the rates or holding them around the same level — 5–5.5% by the end of the year.
BoE will certainly cut — 3.75%-4.0% by the end of the year.
Only Bank of Japan looks bullish on the interest rates to me — 1%-1.5% by the end of 2008.

Anyway, this is just a Forex trader’s forecast, so don’t rely on it much. It would be also interesting to see your forecasts. Feel free to leave one in the comments.

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