In January, EUR/USD after a rebound at the end of 2023, it weakened again. Economists from MUFG Bank analyze the pair’s outlook.
EUR/USD correction lower followed by rebound to new highs
Throughout the year, the forward market suggests remarkably synchronized easing by the Fed and the ECB, which, if set up correctly, would indicate limited room for large moves in EUR/USD trailed yields.
We remain neutral on EUR/USD in 1H, but we see a slowing US economy emerging, somewhat contrasting with a slight pick-up in Eurozone growth, allowing EUR/USD to move higher in 2H, although this move will be limited by the US politics. risks.
