Euro Forecast: $1.15 by Mid-2025, ECB Rate Cuts Key

Via a note from Commerzbank, in summary:

• forecasts the euro could climb to $1.15 by the middle of next year
• forecast hinges on the European Central Bank reducing interest rates more cautiously than anticipated, especially compared to the Federal Reserve

And cautions that regardless, EUR gains may not last:

• ECB’s long-term policies could be overly accommodative (this will increase inflation risks)
• euro’s recent strength limits further upward movement, making it susceptible to unfavourable news and developments
• expects euro to weaken against the USD in H2 of 2025, citing the Fed may have completed its rate cuts, potentially leaving US rates higher than projected

This article was written by Eamonn Sheridan at www.forexlive.com.