USD: Dollar Strength Expected as Fed Maintains Policy Course
The USD is anticipated to retain its strength through June, with the Federal Reserve holding steady on rates while monitoring inflation. U.S. economic data in May reinforced dollar demand, with growth in retail sales and employment figures. Analysts see the USD as likely to stay strong unless unexpected dovish comments emerge from the Fed, which would impact dollar demand.
EUR: Limited Growth Prospects Could Weigh on the Euro
The EUR outlook for June remains cautious, with economic recovery in the Eurozone lagging due to weak industrial output and sluggish retail growth. ECB policies remain a key focus, and if data fails to improve, further easing could be anticipated. Analysts expect the euro may face continued pressure against the dollar, especially if sentiment around Eurozone growth does not improve.
GBP: Inflation Concerns Leave Sterling Uncertain
In June, the GBP is expected to see some volatility as the Bank of England grapples with inflationary concerns and subdued domestic growth. While May’s data indicated some stability, analysts remain divided on whether more rate cuts or stimulus could be forthcoming. The GBPUSD pair could face additional pressure if the USD remains resilient, particularly if inflation concerns persist in the UK.
KES: Shilling Support Continues, But Pressures Persist
The KES is forecasted to remain stable in June, with the CBK’s support playing a critical role. Foreign direct investment and remittance flows have provided steady inflows, though dollar strength does place some pressure on imports. Analysts expect the KES will hold steady barring any major shifts in global markets, though ongoing dollar demand could create slight depreciation risk.
TZS: Tanzanian Shilling Faces Continued Depreciation Risks
The Tanzanian Shilling (TZS) could see gradual depreciation through June due to sustained import costs and a strong dollar. The Bank of Tanzania is likely to intervene if depreciation accelerates, but analysts believe the TZS will continue to face headwinds as import expenses rise.
MWK: Persistent Challenges for Malawian Kwacha
The MWK is forecasted to continue facing challenges through June, particularly with inflationary pressures from global commodity prices. The Reserve Bank of Malawi may consider limited interventions, though with fiscal constraints, the outlook for the MWK remains bearish.
Gold: Modest Demand as Inflation Concerns Persist
Gold may experience modest demand in June, with inflationary pressures in several global economies prompting safe-haven interest. If U.S. markets display any weakness, gold could rally, but a strong USD may limit significant gains.