The European Central Bank raised interest rates on Thursday, but signaled the move could be the last of the current cycle. ING economists analyze the outlook for EUR/USD.
November and December are seasonally weak months for the Dollar
We expect the EUR/USD to trade on the weak side now that the ECB has told us that rates have peaked. However, we suspect that good demand will emerge near the 1.05 level. Our view is that US “exceptionalism” will not last and that US growth will converge with Eurozone weakness in 2024.
Normally, November and December are seasonally weak months for the Dollar. Our view is that the weakness in US activity data will become evident over time and that the current period will come to be seen as “the best that can happen”, both for US growth and for the Dollar. We maintain our forecast that the EUR/USD will trade above 1.10 by the end of the year.
Source: Fx Street
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