EUR/USD to peak in Q1 2024 rather than in Q4 2023 – Commerzbank

Economists at Commerzbank have adjusted their EUR/USD forecast a little. They expect higher EUR/USD levels over the course of the year.

EUR/USD is likely to trend upwards over the coming months

“As both the market and our economists expect the US central bank to start cutting its key rate again following a reasonably short break whereas the ECB will leave everything on hold for longer, EUR/USD is likely to trend upwards over the coming months.” 

“However, due to the delayed start of the Fed’s rate cut cycle, we only expect EUR/USD to peak in Q1 2024 rather than in Q4 2023 as we did before. After that, EUR/USD is likely to weaken again though.” 

“Inflation in the US and the Eurozone is likely to remain above inflation targets, but the USD is likely to benefit from the fact that the US central bank is seen as the more determined in the fight against inflation whereas there is likely to be a certain amount of scepticism towards the ECB.”