Now lowering Q4 2023 EUR/USD forecast to 1.00 from 1.05 previously; expect rate at 1.03 for Q1 2024
Having reached our initial bearish target of 1.05, we take another look at the underlying drivers of the euro and conclude that additional downside is still warranted.
In the near term, eurozone growth risks and nontrivial odds of another Fed hike informs our greater confidence in euro weakness in the next two quarters.
Persistence of weak European growth relative to the US and relative terms of trade have deteriorated vs. the US with the recent rise in oil prices, hastened by conflict in the Middle East
EUR/USD unable to deliver outsized positive returns in extended periods of declining productivity.- J.P. Morgan FX Strategy
Comments