We continue to expect the US economy to slide into recession in 2024 and that the Fed will cut its key interest rate by 100 bps in response. However, we have to state that the economic outlook is uncertain. Given that the market has currently priced out this scenario very clearly, too aggressive a forecast would be inappropriate. We are therefore reducing our target in EUR/USD from 1.15 to 1.12. 

Please keep in mind: if a US recession occurs, we still consider EUR/USD levels above 1.12 likely. With the more cautious forecast, we merely want to account for the high forecast uncertainty.