Look for parity in EUR/USD in 2025 – JPMorgan

Investing.com – JPMorgan has turned even more euro bearish in the wake of the US presidential election, forecasting a test of parity for EUR/USD by the first quarter of 2025.

At 09:15 ET (13:15 GMT), EUR/USD traded 0.8% at $1.0499, bouncing at the start of the new week, having fallen almost 3% over the course of the last month.

The year 2024 has been another year of eurozone growth disappointment versus the US, said analysts at JPMorgan, in a note dated Nov. 22. 

“Softer-than-expected Eurozone growth isn’t a new phenomenon but instead a trend that has been intact for seven consecutive years, a theme that FX investors are ostensibly bored with but frustratingly continues to manifest in price action,” the bank said.

Unlike 2023, EUR/USD performance in 2024 was driven entirely by rate differentials and other factors receded in relevance. 

The EUR/USD forecast for 2025 looks for a test of parity by 1Q as tariff risks get more fully priced in, with a recovery to $1.08 later in 2025 stemming from potential for mitigating factors and US resilience running out of steam.

The near-term bearish EUR/USD forecast is consistent with our previously published roadmap for the US elections in a ‘Red sweep’ and now accounts for the potential for tariffs as well as the new ECB / Fed calls – a cut to below neutral to 1.75% for the ECB by mid-year even though the Fed will be at 4% at that time, and for the ECB to then be on hold but for the Fed to cut to sub-4% by the end of the year. 

The bank cites eurozone vulnerability to trade conflict stemming from manufacturing reliance, trade openness and the policy response (monetary easing rather than fiscal stimulus).

This will cement the Japanisation of the euro, with the single currency set to become among the worst-ranked currencies globally on nominal/real yields in 2025.

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

    Forex Trading Regulations in 2025: Rules for Traders

    • May 3, 2025
    Forex Trading Regulations in 2025: Rules for Traders

    Why Temu Halted China Shipping?

    • May 3, 2025
    Why Temu Halted China Shipping?

    What Is the Bid-Ask Spread in Forex and Why Does It Matter?

    • May 3, 2025
    What Is the Bid-Ask Spread in Forex and Why Does It Matter?

    Equities Now Make Up 90% of Gildencrest Capital’s Revenue, but Profit Without FX Drops 95%

    • May 3, 2025
    Equities Now Make Up 90% of Gildencrest Capital’s Revenue, but Profit Without FX Drops 95%

    Weekly Recap: Google Lifts IG France’s Ad Restrictions, XM Owner Buys Stake in a Cyprus Bank

    • May 3, 2025
    Weekly Recap: Google Lifts IG France’s Ad Restrictions, XM Owner Buys Stake in a Cyprus Bank

    How to Calculate Forex Position Sizing & How Much to Risk?

    • May 2, 2025
    How to Calculate Forex Position Sizing & How Much to Risk?