The Fed is, and should remain, the single most important driver of EUR/USD: our call is they will cut more than markets expect and crucially around 50 bps more than the ECB. 

Given that we also see both central banks starting to ease in June, we expect a bigger rally in EUR/USD in the second half of the year, when USD:EUR short-term rate convergence should accelerate. We target 1.1400 in 4Q24.

Rising geopolitical tensions, upward pressure on energy prices and a potential re-election of Donald Trump could all lead to a stronger Dollar.