Economists at UBS expect EUR/USD to advance nicely throughout the rest of the year and reach 1.16 by end-2023.

ECB faces more immediate pressure on inflation than the Fed

“European Central Bank policymaker Peter Kazimir last week predicted that the central bank may need to keep raising rates for longer than anticipated due in part to recent readings on core inflation, wage pressures, and profit margins.”

“In our view, the ECB faces more immediate pressure on inflation than the Fed. While our base case is for the Fed to pause at its June meeting, we see ECB hikes as likely in both June and July.”

“We see EUR/USD moving higher this year, targeting 1.16 by year-end.”