Analysts at JP Morgan (JPM) expect EUR/USD pair to average 0.9500 during the first half (H1) of the next year (2023) while also citing possibilities of a test towards 0.9000 (assuming no de-escalation in geopolitics).
The investment bank also mentioned in its latest report that its economists expect the US Federal Reserve (Fed) and the European Central Bank (ECB) to pause in the first quarter of 2023 (1Q23) at 5% and 2.5% for the rest of 2023.
The same will leave the policy rate differential just 50 basis points (bps) shy of its 15-year low.
“The outlook envisions a mild recession in the US at the end of 2023, which should hamper recovery in the Eurozone (EU is expected to grow by 0.2% vs. US of 0.4% next year,” said JPM in the report.
JP Morgan also mentioned that a Fed pause is not a sufficient condition for a rebound in the EUR/USD while adding, “Trading strategy is tactical, with risks being an ongoing improvement in regional growth momentum or a potential ceasefire.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.