1105 GMT – Sterling is expected to weaken into next year due to a weak U.K. and global economic outlook, while the prognosis for the Swedish krona and the Norwegian krone is also bleak due to their sensitivity to global risk appetite, says Dominic Bunning, head of European FX research at HSBC, in a webinar. The U.K. faces a relatively weak domestic story as the impact of interest-rate hikes starts to bite, he says. Swedish and Norwegian currencies will also struggle as they are two of the most highly leveraged to global growth, especially as the Norges Bank and Riksbank are coming to the end of their hiking cycles, Bunning says. (jessica.fleetham@wsj.com)

Euro to Remain Weak, to Fall to $1.02 By Mid-2024, HSBC Says

1056 GMT – The euro will remain weak, falling to $1.02 by mid-2024 due to a weak eurozone economy versus a “very strong, long-lasting recovery in the U.S.,” Dominic Bunning, head of European FX research at HSBC says in a webinar on the 4Q and 2024 outlook. HSBC expects the eurozone to be “persistently weaker than the U.S.” and “clearly diverging to the downside.” Market pricing of U.S. interest rates being cut further and faster than in the eurozone will support the dollar if these turn out wrong, he says. A weak China outlook will hurt the euro too, though HSBC doesn’t expect the euro to fall to parity as it did in late 2022 as energy prices have dropped since then. (jessica.fleetham@wsj.com)

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