EUR/USD: Economists Predict Euro to Rise Against by End of Year

According to economists at Commerzbank, the Euro (EUR) is expected to gain some value against the US Dollar (USD) towards the end of the year as the US moves closer to rate cuts. The Federal Reserve is expected to commence cutting rates again in early 2024, which is likely to reduce the demand for the USD's 'safe haven' property as market concerns subside. As a result, the EUR/USD exchange rate is predicted to rise.

The European Central Bank (ECB) and the Federal Reserve are both expected to end their rate hike cycles in the summer. However, while the ECB rates are expected to remain stable, the Fed is expected to begin cutting rates again in early 2024. This convergence of monetary policies is seen as a significant advantage for the Euro.

The economists at Commerzbank have set a target of 1.12 for the EUR/USD exchange rate. As market concerns ease, the demand for the USD's safe haven property is expected to decrease, which would lead to a rise in the EUR/USD exchange rate.