EUR/USD has moved up from near 0.95 to buying and selling round 0.98. Nonetheless, economists at Nordea count on the pair to maneuver again decrease and backside across the begin of 2023.
A terms-of-trade shock will weigh on EUR/USD
“Some would possibly ponder whether the rally for USD is lastly behind us, however we don’t assume so and imagine this aid rally in monetary markets is momentary – we’ve got seen related episodes many instances over the previous 12 months.”
“Extra ache forward for monetary markets will proceed to favor secure havens such because the USD. Furthermore, the US financial system remains to be resilient and can possible fare higher than energy-importing main economies in Europe and Asia.”
“We see EUR/USD pushing barely under 0.95 over new-year, supported by increased USD rate of interest differentials and the term-of-trade disaster within the euroarea.”
