LONDON (Dow Jones)--JPMorgan Chase & Co. (JPM) Monday raised all its 2012 forecasts for the dollar, predicting a rise in the safe-haven currency against all major units except the yen based on Greece's lurch towards a euro exit, China's ongoing slowdown and the recent loss of momentum in the U.S. economy.
The bank said it had cut its view on the euro against the dollar to reflect the intensification of the current euro-zone economic crisis and now sees the common currency trading at $1.22 against the greenback in the second and third quarters before inching up to $1.24 by the end of 2012.
It added that euro-zone stress would likely accelerate the demise of the Swiss National Bank's floor in the euro against the franc, which stands at CHF1.20.
"We are more comfortable in predicting the ultimate demise of the floor, and recommend hedging accordingly, than in calling the timing of such a shift," the bank said.
Based on a 50% probability of a Greek exit from the currency bloc in the coming months, JPMorgan sees the euro trading at CHF1.15 against the franc from the third quarter onwards and the dollar at CHF0.99 against the franc by end-June and CHF0.94 by end-September.
It also lowered its forecast for the Australian dollar and now sees the currency at $0.96 against the buck in the second and third quarters as a result of the Greek turmoil, China's slowdown and the recent cut to interest rates and cautious outlook by the Reserve Bank of Australia.
However, it did not raise its forecast for the dollar against the yen, having lowered its view on May 4 because the pair failed to rally following the monetary easing by the Bank of Japan in late April. It sees the pair staying in a range in the high 70s in the medium term.
JPMorgan is the sixth-largest currencies-dealing bank by market share according to the 2012 benchmark Euromoney survey.
