Euro rose in European trade on Tuesday against a basket of major rivals, moving away from three-month lows against the dollar.
Euro marked the worst monthly performance in January since 2015 amid concerns about a widening policy gap between Europe and the US.
EUR/USD
EUR/USD rose 0.2% to 1.0762, with a session-low at 1.0737, after losing 0.4% on Monday, plumbing a three-month trough at 1.0723 following bullish remarks by Fed Chair Jerome Powell.
In January, euro fell over 2% against the dollar, the first monthly loss since September 2023, with the odds of a US interest cut in March declining.
Grim Outlook
A batch of US investment banks including Credit Agricole expect the EUR/USD to sustain more losses amid strong US data and bullish remarks from Fed officials.
RaboBank
US stock indices settle near record highs ahead of Fed meeting
RaboBank’s economists don’t expect the Fed to start cutting rates before June.
Indeed, Fed Chair Jerome Powell said in a recent TV interview that it’s not likely the FOMC will cut interest rates in March.
Thus, Rabobank maintained its EUR/USD forecasts for March at 1.07, and for three months until June at 1.05.
Credit Agricole
Credit Agricole’s economists expect the euro to be one of the worst performing major currencies in 2024.
The EUR/USD pair in particular is expected to sustain heavy losses as the ECB is expects to cut rates more aggressively than the Fed.
The bank expects the EUR/USD price to reach 1.07 by the middle of the year, and to reach 1.05 by the end of the year.
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