EUR/USD Forecast: Parity Test Expected as Dollar Strengthens

UBS has revised its forecast for the EUR/USD exchange rate, predicting that the pair will soon test parity due to the strength of the U.S. dollar. The continued strength of the U.S. economy, driven by strong GDP growth, a robust job market, and the Federal Reserve’s tightening policies, is expected to keep the dollar resilient. In contrast, Europe’s sluggish recovery and weak economic data have kept the euro under pressure. As the U.S. dollar strengthens, the EUR/USD pair may hit parity, where one euro equals one dollar. While this scenario presents short-term challenges for the euro, UBS suggests that a rebound towards the 1.05-1.10 range is possible by late 2025, driven by potential changes in U.S. economic growth or ECB policies. Investors should be prepared for volatility and stay alert to key economic data and global trade developments.

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EUR/USD Forecast: Parity Test Looms as Dollar Strengthens