EURUSD and Central Bankers Stance – Subsequent dovish words by Fed Chairman Powell, combined with modestly bullish comments by ECB President Caused investors to assume think the Federal Reserve would take the initiative in relaxing monetary policies. Including decreasing the rate of interest in 2024. The dollar’s value shall remain squeezed assuming market sentiment fails to get a counter-hints. According to Societe Generale, the DXY might fall from 102.50 to a value below 100 mark. Potentially by as much as 97 pts. According to a Reuters survey of specialists, the US greenback will depreciate in the following year. Accordingly, the EURUSD might hit 1.1500 depending on international and cyclical situations.
EURUSD Price Estimations and Projection
As per UBS Investment Management’s baseline situation, a drop in American economic expansion. Declining price inflation, and projections of reduced rates of interest could benefit both stocks and bonds. The EURUSD set, according to UBS, is trading around 1.1200 mark. The Commerzbank AG predicts a top of 1.1200. zone. Economists predict the euro is going to temporarily appreciate versus the US currency prior to dropping anew. They predict that the rate would climb to 1.1200 by the end of 2024 before falling to 1.0800 level in the middle of 2025.
According to some experts, the EURUSD ratio will continue to rise reaching 1.1800 mark in the H2 of the year 2024. Analysts stress, nevertheless, that such an estimate relies solely on the potential path of US Fed and Eurozone policy. We think – “The exchange rate disparity isn’t the sole variable driving the EURUSD trajectory.” Poor European economic growth & political instability around the reinstatement of the Growth & Stability Pact predict that EURUSD will conclude the year near 1.0600, mark reaching its high point in 2024 approaching 1.1500 instead of 1.1800 zone, as some other predict.
The US dollar
The Fed’s soft Dec shift has strengthened the argument for the US dollar’s continued slide towards the year 2024. While resilience in the United States economy could restrict the USDs descent.
Following a 2-decade peak on the heels by the US Fed‘s increase in interest rates in the year 2022, The U.S. dollar has remained fairly range-limited lately. thanks to solid growth in the US and the Federal Reserve’s pledge to maintain borrowing prices rising.
Summary
Based to the most recent EURUSD projections for 2024, the euro versus USD – the surge is going to be led by the US dollar’s peg. Aside beyond the Federal Reserve’s relaxing narrative, here also exists the possibility of American financial slippage. Plus, de-dollarization, each of which might be slow-burning. there is obviously the little problem of the US presidential elections.
The main barriers to a EURUSD gain are sluggish European development. With the possibility that the European Central Bank might decrease rates with the US Fed. The predicted reduction of yielding variances at the shorter part of the curves will be limited as a result.
Source: TradingView
