We forecast EUR/USD at 1.14 and USD/JPY at 103.00 – BofA

As per the latest Global Research report from the Bank of American (BofA), the US dollar (USD) and Japanese yen (JPY) are likely to witness further buying in the fourth quarter (Q4) due to their safe-haven nature. The underlying reason spotted is the global economic weakness due to the coronavirus (COVID-19) resurgence.

Key quotes

The strong rebound in 3Q was temporary, driven by base effects from the 2Q lockdown.

Indeed, global data have already started weakening, as the base effects are behind. We expect reintroduction of COVID-19 measures in most countries, and particularly in Europe, will also contribute to a weak 4Q. 

We note the US economy continues to perform better than most of the rest of G10.

EUR/USD and USD/JPY are both down…

By the press time of early Monday, EUR/USD fails to extend Friday’s run-up while taking rounds to 1.1812, down 0.12% intraday. On the contrary, USD/JPY remains offered and keeps the previous day’s weakness directed towards 105.50, currently down 0.05% to 105.55.