Dollar will continue rally vs. euro, Barclays says
By Deborah Levine
NEW YORK (MarketWatch) -- Barclays Capital revised its forecast for the dollar versus the euro for the next six months, saying the greenback has appreciated more quickly than expected due to "several unexpected developments such as China tightening and a faster-than-expected deterioration in the Greece situation." The firm now expects the euro to fall to $1.35 in the next three- and six months, but still end the year at $1.45. The euro bought $1.3928 on Friday. Also, "recent political developments in the U.S. suggest the relative fiscal improvement may be even more U.S. dollar-positive than we previously thought," wrote David Woo, head of the firm's global foreign-exchange strategy, in a report released late Thursday. Namely, the election of Scott Brown in Massachusetts makes a second stimulus package less likely before mid-term elections, Woo said. "The core arguments behind our U.S. dollar-bullish view remain unchanged: an effective tightening of U.S. monetary policy following the end of asset purchases and an improvement in the U.S. fiscal position relative to Japan and Europe will be the key drivers this year," he said.