We expect the EUR to be at 1.15 at the end of 2024. The driver of this is the bearish USD view, which we saw take the EUR to 1.10 in late November. We think cyclical factors will also drive the EUR higher, based on a view that growth indicators are stabilising and the EUR/USD low has already been set for this cycle.

The upward move in the EUR will likely be more dominant in H2 2024, as the USD is seasonally stronger at the start of the year. 

We expect the ECB to begin easing in March 2024. Interest rate cuts are not necessarily negative for the EUR. As the real yield differential between the US and EUR narrows, we think this will contribute to supporting upside in the EUR/USD.