A larger euro depreciation would cushion the impact of tariffs on growthBut it would make a larger impact on inflationIf euro touches parity against the dollar, we wouldn’t lose as much in terms of competitivenessI 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 lowerBNP Paribas are forecasting EUR/USD to parity in 2025Rabobank look for EUR/USD to parityEUR/USD could test parity in 2025 before modest recovery – MUFGHSBC forecasts EUR/USD to 0.99 by the end of 2025Goldman Sachs expect EUR/USD under parity in scenario Trump wins US election
This article was written by Justin Low at www.forexlive.com.
