Our forecasts still call for mild gradual appreciation over 2023. However, this expectation is predicated on the expectation that markets would gravitate back to fair value (which we see at around 0.65), and the risks are skewed toward that not happening, especially if FX markets continue to take a ‘Goldilocks’view of the US’ ability to tame inflation without causing a recession, which is the current vibe. 

In the near term, a break of 0.60 would put the June low of 0.5985 in focus, and beyond that, the 2022 low of 0.5512.