Economists at Danske Bank believe that weaker GDP growth and the Fed are set to underpin the US dollar. Therefore, they forecast EUR/USD at 1.13 by the end of the next year.

“The USD depreciation in H2 20 reflected market optimism about economic recovery. We expect the USD to strengthen as this effect fades.”

“With the Federal Reserve likely to start noticeably tightening monetary policy in the period until end-2022, we expect the positive USD trend to return.”

“EUR/USD Forecast: 1.17 (1M), 1.16 (3M),1.15 (6M), 1.15 (12M), 1.13 (end-2022).”

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