EUR/USD Price Forecast 2024: Will We See Parity?
Investing.com - The dollar has risen to levels against the euro not seen since November last year. Some analysts think still further gains are on the card, with the potential for the EUR/USD pair to fall to parity.pair traded at 1.0690, recovering slightly from Tuesday’s trough of 1.0601, the lowest the pair has fallen to since Nov. 2.The escalating geopolitical tensions between Israel and Iran have created a safe-haven boost to the U.S.
“From pricing six Fed rate cuts at the start of the year, the market is now pricing under two,” he added.said, on Tuesday, that recent data on inflation have not given policymakers the greater confidence needed for them to pivot to interest rate cuts soon. “The ECB is keen to show its policy independence saying that eurozone inflation had been supply-side led while the U.S. is suffering some stickier demand-led inflation,” Turner said. “The market prices just over three ECB cuts this year.”This divergence between the Fed and the ECB narratives is likely to lead to further EUR/USD losses, with ING looking for the pair shortly to test the 1.0600 psychological level.
UBS cut its EUR/USD in a note dated April 17, now forecasting the pair to trade at 1.0500, from 1.1200, at the end of 2024, and at 1.0500, from 1.0900, at the end of the second quarter. “Low gas prices mean that the eurozone’s terms of trade are in a much better position – and suggests that if yield differentials do drive EUR/USD sub 1.05 – it should not stay there for long,” he added.
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