Economists at Commerzbank have adjusted their EUR/USD forecast for the next year. 

EUR is likely to weaken again in the second half of next year

“We now expect rates to peak at 6% (previously 5.5%) in the US and at 4% in the Eurozone (previously 3.5%). However, what is more decisive for our EUR/USD projections is that we do not expect any ECB rate cuts until the end of the forecasting horizon in late 2024 anymore, whereas we assume that the US will lower its key rate even further in 2024 than previously projected.”

“We have left our EUR/USD projections for 2023 unchanged, but now expect a further rise in EUR/USD to 1.12 until mid-2024.”

“Only in the second half of next year EUR is likely to weaken again as the realisation is then going to take effect that inflation in the Eurozone is more stubborn and that the ECB was not restrictive enough to return inflation to its target. This will put pressure on the Euro.”