Despite measures from most central banks to limit the supply of U.S. dollars, the currency has what it takes to end the year stronger, according to Wells Fargo.
The U.S. Dollar is Expected to Stay Robust
Analysts are America’s multinational financial services firm; Wells Fargo is confident about the USD’s continued strength. The analysts expect the U.S. dollar to strengthen further until 2022.
According to them, despite the aggressive stance of foreign central banks against the dollar, the move would not impact the currency. They added that international policymakers would struggle to keep up with the tightening policy of the U.S. Federal Reserve.
Moreover, the experts noted that Fed is likely to be in charge of tightening measures by the international policymakers. As a result, the bank will continue to forecast that the USD will continue to hold sway throughout the end of the year.
Moreover, the dollar’s strength could remain strong as the Fed prepares to raise the interest rate again. The expected hike would be 75 bps as the Fed aims to reduce the country’s balance sheet.
Wells Fargo Predicts a Short-Term Decline for EUR/USD
The European Central Bank (ECB) raised its interest rates on Thursday to 75 basis points. The move addresses the lingering inflation that market players fear would overwhelm consumers.
However, the ECB’s president made a hawkish statement on more rate hikes as Europe continues to battle double inflation.
The Euro fell across the board, while the dollar soared due to the Fed’s Powell comments. Wells Fargo analysts expect the EUR/USD to fall further in the short term as the Fed tightens even more and the Eurozone’s economic climate worsens.
The ECB is expected to raise its deposit rate by 50 basis points in October. In addition, it would also hike it by 50 basis points in December, bringing the deposit rate to 1.75% by the end of 2022.
Thus, the experts anticipate a concluding 25 basis point rate hike to 2.00% at the beginning of 2023. In terms of currency, they expect the Euro to fall further in the near term. This is because the
The Fed is still enforcing, and the Eurozone’s economic prospects are less spectacular
Wells Fargo Canceled Customers’ Bank Accounts
According to reports, half a dozen customers had their Wells Fargo (WFC) banking accounts canceled without prior notice. However, the affected customers have one thing in common. They have previously worked or are currently working in the adult industry.
Meanwhile, some had used their accounts for more than 20 years before the recent incident.
This happened because some banks have expressed alarm about the high rate of chargebacks on adult industry accounts. Some customers, after they purchase adult content, request a refund. Banks have revealed that this is not sustainable as it can put them in a high-risk condition.
Meanwhile, Wells Fargo claimed no wrongdoing as it only acted in the interest of its business.