Slower growth and Federal Reserve are set to boost the US dollar. Therefore, economists at Danske Bank expect the EUR/USD to move downward over the coming months.

Dollar set to strengthen in 2023

“Inflation prints will probably come down in 2023 but we see little room for strong global GDP growth as long as the global economy is running close to capacity. We expect Europe to take the brunt of the hit, given its exposure to cyclical industries and large commodity imports.”

“We expect monetary policies to remain tight and price levels to stay high for a number of years, and the European economies look particularly challenged in this environment.”

“Forecast: 0.99 (1M), 0.98 (3M), 0.96 (6M), 0.95 (12M), 0.93 (end-2023).”