The euro and pound weakened in Q3

Sources: Bloomberg and Wells Fargo Investment Institute. Daily data from January 1, 2018 to September 30, 2021.

Key Takeaways

  • We expect the euro to recover its losses versus the U.S. dollar in 2022, as U.S. growth slows to converge with the eurozone and as slowing bond purchases lead eurozone yields moderately higher.
  • The yen may remain within recent relatively narrow trading ranges. The pound may recover if the U.K.’s successful vaccination program allows earlier economic normalization, but gains may later be offset by growing economic costs from Brexit.