The US Dollar strengthened strongly against G10 currencies during 2022, before paring back some gains during the winter. Looking ahead, economists at Nordea see a weaker USD and forecast EUR/USD at 1.15 by the end of the year.

Weaker USD ahead

“We believe global factors are in favour of a weaker USD against the EUR and see EUR/USD at 1.15 by year-end of this year. However, the tensions in markets will likely continue.”

“An economic recession and stock market taking a leg lower (earnings recession) is a risk to our USD view, but we are in the cautiously optimistic camp. Moreover, it is quite difficult to pinpoint exactly if and when stock markets will fall.”