The FOMC delivered, as expected, a 75 bps increase in the Fed Funds target range to 3.00-3.25%. EUR/USD's move lower pre and post-Fed meeting is not an encouraging sign. Thus, economists at TD Securities expect the pair to suffer further losses.

EUR/USD year-end target set at 0.96

“We suspect geopolitically posturing ahead of this meeting helped to drive the pair lower. From where the Fed sits, there is still no reason to look topside the pair.”

“The ECB has been talking a big game recently, in what seems to be correlated with the further below-parity EUR/USD drifts. The reality is that they will not be able to compete with the Fed on rates, no matter how hawkish they sound.”

“EUR is a pro-cyclical currency, and the global growth impulse is worsening. The balance of payments remains a mess despite great strides made to improve energy security for the upcoming winter. That could change – for better or for worse.”

“We remain content with our 0.96 target by year-end for now.”