Investing.com – JPMorgan has turned much more euro bearish within the wake of the US presidential election, forecasting a take a look at of parity for by the primary quarter of 2025.
At 09:15 ET (13:15 GMT), EUR/USD traded 0.8% at $1.0499, bouncing at the beginning of the brand new week, having fallen nearly 3% over the course of the final month.
The yr 2024 has been one other yr of eurozone development disappointment versus the US, mentioned analysts at JPMorgan, in a notice dated Nov. 22.
“Softer-than-expected Eurozone development isn’t a brand new phenomenon however as an alternative a development that has been intact for seven consecutive years, a theme that FX traders are ostensibly uninterested in however frustratingly continues to manifest in value motion,” the financial institution mentioned.
Not like 2023, EUR/USD efficiency in 2024 was pushed completely by charge differentials and different elements receded in relevance.
The EUR/USD forecast for 2025 seems for a take a look at of parity by 1Q as tariff dangers get extra absolutely priced in, with a restoration to $1.08 later in 2025 stemming from potential for mitigating elements and US resilience working out of steam.
The near-term bearish EUR/USD forecast is per our beforehand revealed roadmap for the US elections in a ‘Crimson sweep’ and now accounts for the potential for tariffs in addition to the brand new ECB / Fed calls – a lower to beneath impartial to 1.75% for the ECB by mid-year regardless that the Fed shall be at 4% at the moment, and for the ECB to then be on maintain however for the Fed to chop to sub-4% by the tip of the yr.
The financial institution cites eurozone vulnerability to commerce battle stemming from manufacturing reliance, commerce openness and the coverage response (financial easing somewhat than fiscal stimulus).
This can cement the Japanisation of the euro, with the only forex set to grow to be among the many worst-ranked currencies globally on nominal/actual yields in 2025.
