UBS sees EUR/USD climbing toward 1.16 by 2025

On Tuesday, UBS projected a volatile period ahead for the EUR/USD currency pair, with expectations of a gradual rise above 1.10 and toward 1.16 by later in 2025.

“The US election poses a short-term risk to our view. Nevertheless,

we still think EURUSD should gravitate to 1.16 in 2025. Investmentwise,

we recommend selling bouts of USD strength, especially in the

case of a Trump victory,” said the firm in a note.

After experiencing weakness in August and September, the US dollar has made a comeback in October, UBS highlighted. This resurgence was influenced by a stronger-than-expected US labor market report and robust US PMI data. Conversely, the European Central Bank (ECB) cut rates in response to lower-than-anticipated European inflation, as evidenced by the decision in last week’s meeting.

Looking forward, UBS anticipates a bumpy road for the currency pair, with the upcoming US labor market reports being a key determinant for the Federal Reserve’s future actions. However, the interpretation of these reports may be complicated by the recent hurricane Milton, according to the analysts. Additionally, the upcoming US election could inject further volatility into the market, especially with the possibility of an unclear outcome.

Despite the potential for initial dollar strength following a Trump election win, UBS does not view a second Trump administration as unequivocally positive for the USD. The firm suggests that tariffs could harm US GDP and consumers more than they affect the rest of the world, advising investors to take advantage of any such periods of USD strength.

In Europe, UBS maintains a positive outlook, anticipating a growth recovery leading into 2025. They also believe that the current pessimistic sentiment means any positive economic data from Europe could have a significant impact on the euro. The firm remains consistent with their forecast that the EUR/USD will ascend above 1.10 in the forthcoming weeks, maintaining a target of 1.16 for later in 2025.

For investors, UBS sees the recent dip below 1.10 as an opportunity to reduce USD exposure. The firm identifies the next support level at around 1.08, with resistance likely at 1.12 and 1.15. While acknowledging risks, including those associated with the US election, UBS suggests there is a greater chance of the exchange rate climbing rather than falling.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

This post is originally published on INVESTING.

  • Related Posts

    Oil falls after Trump reverses Colombia sanctions threat

    By Anna Hirtenstein LONDON (Reuters) -Oil prices wavered on Monday after the U.S. and Colombia reached a deal on deportations, reducing immediate concern over oil supply disruptions but keeping traders…

    Dollar gains on tariffs fears; euro looks to ECB meeting

    Investing.com – The US dollar slipped lower Monday, rebounding after recent losses as attention returned to the potential for trade tariffs from the Trump administration at the start of a…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    What Is the Difference Between Bid Price and Offer Price in Forex?

    • August 8, 2025
    What Is the Difference Between Bid Price and Offer Price in Forex?

    EC Markets Opens Mexico City Office After Launching in Cyprus and Mauritius

    • August 8, 2025
    EC Markets Opens Mexico City Office After Launching in Cyprus and Mauritius

    What Is Loss Aversion in Forex and Why It Hurts Performance?

    • August 8, 2025
    What Is Loss Aversion in Forex and Why It Hurts Performance?

    What Is Position Bias in Trading and How to Avoid It?

    • August 8, 2025
    What Is Position Bias in Trading and How to Avoid It?