Nordea’s economists still hold the view of a higher level EUR/USD at the end of the year.
EUR/USD continues to seek higher levels
“The Fed is at or near a pause in rate hikes, while ECB needs to do more, heading higher EUR/USD. However, it is far from certain that we will get significantly higher EUR/USD given that markets are pricing in Fed rate cuts after the summer. If the markets disappoint, negative USD bets could be reduced. We therefore see sideways movement in EUR/USD next year.
“The wild card for the USD remains the higher than usual probability of a global recession in the next few years, which could be in favor of the USD.”
