Bank of America target EUR/USD to 1.15

Bank of America says that with EUR/USD approaching the year-end target of 1.12, the pair has limited upside:

• Market expectations for interest rate cuts by the Fed and ECB are now fully priced in for 2024

(

I’ll mention that after Powell spoke on Monday, these expectations seemed overblown for the Fed:

• USD rises, stocks fall as Powell rises to GDI and base case to cut 25 basis points
• US dollar moves higher as Powell presses cuts

)

Bua continued:

• EUR/USD should rise again in 2025, which will weigh on dollar weakness.
• “Our hypothesis remains that Fed policy easing amid a soft landing in the US will weaken the dollar from an overvalued level.”
• The target is 1.15 by the second quarter of next year
• Holds a buy now trade with stop loss at 1.10 (up from 1.04 previously)
• The target for the end of 2024 is 1.12

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EUR/USD update:

This article was written by Eamonn Sheridan at www.forexlive.com.