forexcryptozone — The greenback just lately hit new year-to-date highs towards its rivals and is more likely to stay sturdy after the Federal Reserve turned extra hawkish at its current December assembly, traders stated. UBS analysts in a current be aware.
“Whereas we nonetheless count on the greenback to say no, we now see much less weak point in 2025 given these components and are adjusting our forecasts barely,” UBS analysts stated in a current be aware.
The much less bearish view on the greenback comes because the buck reached new year-to-date highs in key change charges and expectations for fee cuts to ease in UNITED STATES.
“The greenback has been boosted these days by the prospect of a Fed fee lower and tariff dangers,” analysts stated.
The euro has been notably affected by the power of the greenback, however ought to commerce round $1.05 towards the buck within the first half of 2025, analysts predict.
However a major decline in direction of parity can’t be dominated out, “because of actual tariff threats or new divergences within the macroeconomic context between america and Europe”, the analysts added.
Nevertheless, any motion in direction of parity is more likely to be short-lived, analysts say, as financial circumstances in Europe are anticipated to enhance within the second half of the yr, narrowing the hole between European and US yields.
“The trajectory again in direction of the center of the buying and selling vary or above, 1.08 to 1.10, comes with the concept two-year yield spreads will slender additional to some extent and that Higher macroeconomic information from Europe supplies some underlying help for EURUSD in 2H25,” the analysts stated.
