The economists of Deutsche Bank analyze the outlook for EUR/USD.
USD weakness over the medium term hinges on a dovish turn from the Fed
In recent months, the dollar has stayed afloat. We continue to expect the next move to be lower, due to an eventual dovish turn by the Fed towards easing. We expect this to materialize during the fourth quarter, followed by rate cuts next year.
Our EURUSD year-end forecast remains at 1.15. The good news on the Euro side now seems to be in price, with falling US yields the biggest potential driver for a move higher.
Forecasts for the EUR/USD: Third quarter of 2023 at 1.12, fourth quarter of 2023 at 1.15 and fourth quarter of 2024 at 1.25.
Source: Fx Street
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