Banco BPI's belief the euro and the yen would strengthen last month pushed it to the top of the monthly accuracy league in the Reuters September foreign exchange poll. Agostinho Leal Alves, currency strategist at Portugal's Banco BPI, forecast the euro would strengthen and end September at $1.27, just two cents away from its actual close of $1.29.
European Central Bank President Mario Draghi's promise to do "whatever it takes" to save the currency, within the bank's mandate, buoyed the euro by 2 percent in August. However, a majority of analysts in the September FX poll did not expect the ECB to announce plans to buy Spanish and Italian bonds to ease borrowing costs, widely viewed as a key step to combating the currency bloc's debt crisis.
Most of the 62 analysts polled forecast the euro would remain under pressure and weaken during the month. Alves was one of just 17 who predicted a rise.
"I thought it would be positive for the euro if the ECB started buying European bonds," said Alves. Draghi followed up on his promise by launching a potentially unlimited bond-buying plan at the bank's September 6 meeting, while the US Federal Reserve also said it would buy bonds worth $40 billion every month until the employment situation improves.
Both moves calmed financial markets and saw the euro touching a four-month high during September. But the latest October poll shows strategists expect the euro to hold steady at current levels and end the month at $1.29 before falling to $1.25 in a year's time.
In contrast, Alves expects the euro to perform better.
"Last month, the euro-dollar perhaps started a new trend. It's started to become more calm in Europe and in the euro zone," said Alves, who forecasts the currency at $1.30 in a month, $1.32 in three months and $1.34 in a year's time.
However, there may still be pressure ahead for the bloc. A raft of pallid economic data has convinced many economists that the euro zone slumped into recession in the quarter just ended and will not grow again until early next year.
Banco BPI's Alves also had a near-perfect score on his call for the yen to strengthen and was one of the 25 out of 62 strategists who predicted the currency's direction.
He expected the yen to gain from its August close and end September at 78.0, nearly spot-on when compared with the currency's actual close of 77.9.
Banco BPI beat Aurel BGC's strategists by 7 points to secure first place in September's accuracy league, clocking up a total of 132 points from a maximum possible 150.
However, that is the lowest total a bank has scored to clinch top spot in the Reuters monthly accuracy rankings in over a year, suggesting that September was a particularly challenging month to forecast currencies.
Bank of Tokyo Mitsubishi held on to its lead in the year-to-date league and has scored 946 points out of a possible 1,350 points so far this year.