- A larger euro depreciation would cushion the impact of tariffs on growth
- But it would make a larger impact on inflation
- If euro touches parity against the dollar, we wouldn’t lose as much in terms of competitiveness
- I guess we’ll land with rates somewhere around 2%
- Four more rate cuts is a meaningful scenario that I feel relatively comfortable with
Wunsch is being rather bold in his remarks here as he floats the thought of EUR/USD reaching parity. Then again, it’s not an otherworldly take as many analysts are also seeing that happen next year. Here’s some on that list:
- Deutsche Bank: EUR/USD could fall below parity, potentially reaching 0.95 or even lower
- BNP Paribas are forecasting EUR/USD to parity in 2025
- Rabobank look for EUR/USD to parity
- EUR/USD could test parity in 2025 before modest recovery – MUFG
- HSBC forecasts EUR/USD to 0.99 by the end of 2025
- Goldman Sachs expect EUR/USD under parity in scenario Trump wins US election
This article was written by Justin Low at www.forexlive.com. Source