EUR/USD has moved back above the 1.05 level. But energy issues are set to weigh on the Euro, dragging the pair down to parity in 2023, economists at Rabobank report.

Re-opening of China will increase the competition for global LNG supplies

“While the EUR has been lifted by a decline in gas prices from their highs and hopes that Germany may face less bad recessionary risks, this respite may be short-lived.”

“In spring and summer 2023 Europe could be struggling to refill its gas storage facilities at today’s prices. A re-opening of China will increase the competition for global LNG supplies.”

“While we have lifted our one and three-month EUR/USD forecasts to reflect the recent improvement in risk appetite, we continue to see risk of the EUR dropping back through parity next year as the next wave of the gas price crisis hits.”