HSBC Raises Year-end Euro Forecast To $1.14

HSBC raised its long-term forecast for the euro Monday, arguing that the European Central Bank doesn't have the firepower to continue weakening the currency. Currency strategists at the British bank revised the year-end forecast for the euro to $1.14 from $1.05. The bank also lifted its year-end 2016 forecast for the euro to $1.20 from $1.10. The strategists believe that once investors realize the ECB's ability to expand quantitative easing is constrained, the euro will begin to weaken, according to a team of currency strategists led by David Bloom. HSBC has been one of the most bullish of the major banks on the euro. In April, the bank said the dollar's rapid rise created a valuation bubble. The shared currency was at $1.12 in recent trade, flat with its late-Friday level.