Private Idea: EUR/USD to plunge towards 1.10; USDJPY to 120 ING

In 2022, economists at ING expect the dollar to stay strong. EUR/USD and USD/JPY could trade at 1.10 and 120.00, respectively.

Sharper Fed tightening cycle to propel the greenback
“Assuming that Omicron risks play out closer to the benign end of the spectrum, we look for the sharper Fed tightening cycle to return as a theme in early 2022. This should be good news for the dollar.”

“In a world where the European and Japanese central banks are late to tighten – or have the biggest cause to pause – dollar gains should largely come at the expense of the low-yielding currencies. Here EUR/USD can trade to 1.10 through the year and USD/JPY potentially as high as 120.”
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