UBS have slashed their year-end target for EUR/USD to 1.06 (from 1.12)

UBS have upgraded their outlook for the USD, citing:

  • elevated growth rates in the US
  • the Federal Open Market Committee (FOMC) signalling higher rates for longer (and subsequent lowered pricing for rate cuts next year)


  • EURUSD 1.06 (previously 1.12)
  • USDCHF 0.92 (previously 0.87)
  • GBPUSD 1.20 (1.29)
  • USDJPY 145 (142)
  • AUD 0.65 (0.66)

UBS says the USD will remain well bid until the end of 2023 and shift it from to neutral from least preferred. As for EUR, UBS slash the outlook on that from most preferred to neutral.

  • inflation rolling over globally
  • expect central bank policy rate hikes to be finished by Q4 2023
  • GDP growth in the US has held up much better than expected and compared to other countries, although signs of slowing are emerging
  • in contrast, Europe and China have disappointed
  • for Europe, we think an immediate turnaround is unlikely … positive macro data or a decline in energy prices (natural gas and oil) needs to materialize. But we expect neither driver to do so through the rest of this year.

This article was written by Eamonn Sheridan at Source