Expect EUR/USD to trade on the soft side now that the ECB has told us that rates have peaked. However, we suspect good demand will emerge near the 1.05 level. Our house call is that US ‘exceptionalism’ does not last and that US growth converges on the weak Eurozone story into 2024.

Typically, November and December are seasonally weak months for the Dollar. Our call is that weaker US activity data will become evident over time and that the current period will come to be viewed as ‘as good as it gets’ both for US growth and the Dollar. We are sticking with our call that EUR/USD will be trading above 1.10 by year-end.