EUR/USD will gradually return towards 1.14 in December – Natixis

FXStreet Insights Team FXStreet

Against the weak Dollar, the EUR/USD recovered throughout the first half. Economists at Natixis analyze the pair’s outlook.

Expected improvement in the Chinese economy will be a positive factor for the EUR/USD

The EUR/USD will continue to appreciate in the second half against a weaker Dollar but also against a still restrictive ECB which will result in a reduction in the US/Euro interest rate differential. Furthermore, the EUR will be supported by the resilience of European growth in the second half while the US economy will be in recession.

The expected improvement in the Chinese economy will be a positive factor for the European economy and therefore for the EUR/USD.

The return of a substantial current-account surplus in Europe without any capital outflows, is also a factor supporting the EUR in the medium term.

The EUR/USD will gradually return towards 1.14 in December 2023.

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FXStreet Insights Team

FXStreet

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