EUR/USD has broken below 1.05 for the first time since 2016. Economists at Nordea expect the pair to reach parity later this year, before rebounding in 2023.

EUR/USD poised for a further move down in the months to come

“A higher rate differential and the safe-haven status of the USD argue for movements lower.” 

“We see EUR/USD move down to parity (1.00) sometime before the year-end. At some point, however, the tide will turn. Likely when the Fed reaches the peak of its hiking cycle by summer next year.” 

“We expect EUR/USD to end 2023 around 1.10.”