The above forecasts of course are built on many core assumptions. Using the most liquid FX pair, EUR/USD as the benchmark for the FX market in general, we see a range of outcomes in the 0.88 to 1.21 region.
If you think US inflation will not allow the Fed to cut, if you think a local recession and return of the Maastricht criteria sparks a eurozone crisis, if you think President Trump is elected on an even louder anti-China ticket and if you think tensions in the Middle East escalate into a major energy supply shock – then EUR/USD can plumb the depths.
If, however, like us you think that the Fed is allowed to deliver an orderly easing cycle and that soft landings are seen in Europe and China, then EUR/USD could be somewhere near our 1.15 baseline forecast by end-2024.
We now invite you to take a look through our G10, EMEA, ASIA and LATAM sections for insights into key local factors, such as elections, the fiscal-monetary mixes and also the FX preferences of the local authorities – all of which will shape FX trends next year.
