Economists at TD Securities think EURUSD will decline back below parity despite the most recent uptick. 

EURUSD likely to bottom out around 0.96

“The EUR is not out of the wood yet, leaving us to expect another trip below parity to start 2023.”

“The macro outlook provides a weak handoff to the EUR to start a new year. EUR is closely linked with European and global growth expectations. We don't expect the global outlook to bottom until Q2.”

“EUR is also exposed to a winter terms of trade shock, especially if the weather runs cooler than expected.”

“EURUSD likely to bottom out around 0.96, paving the way for a sharp rally in H2.”