In the opinion of economists at Nordea, the US economy should continue to outperform the euro area, pushing EUR/USD further down.

Hawkish ECB will not save the euro

“The weak euro area economic outlook compared to the US is one important reason why we expect the USD to continue to outperform the EUR, even if we expect the ECB to remain hawkish in the months ahead.”

“EUR/USD will continue to head lower and bottom at 0.95 later this year.”

“There could be a policy divergence among EU countries. If EU members don’t show solidarity with each other in the difficult months to come, then questions about the future of the EUR might come to the forefront again. If this materialises, then the EUR will weaken even more against the USD.”