Economists at ING have been bearish on EUR/USD this year, but not bearish enough. They are cutting their EUR/USD forecast by roughly 4-5% across 2022-24 profile curve.

Lowering the forecast profile

“A cut in our EUR/USD forecast profile is now more consistent with our Rate Strategy Team’s view on the eurozone/US two-year swap spread divergence. It has this spread continuing to move against EUR/USD into year-end, with Fed easing expectations only starting to make their mark in 1Q23.”

“Combining macro, monetary policy, valuation and geopolitical views together, it now feels like the right time to take 4-5% off our EUR/USD forecast profile curve.”