Bank of America Revises EURUSD Forecast, Predicts Strengthening Dollar Amid Fed's Cautious Rate Cuts

Bank of America Revises EURUSD Forecast, Predicts Strengthening Dollar Amid Fed’s Cautious Rate Cuts

Bank of America economists have revised their EURUSD forecast, predicting the pair will reach 1.12 by the end of this year, as the dollar strengthens against the euro. However, they note that the Federal Reserve’s transition from rate cuts will be more gradual than previously anticipated.

The economists suggest that the dollar will climb slightly against the euro in the short term. Looking ahead, BofA now expects the EURUSD to be at 1.17 by 2025, down from their previous forecast of 1.20, as they adjust their outlook on U.S. inflation and the Fed's easing cycle.

This updated forecast reflects a more cautious view of the U.S. economy, with BofA stating that they are “more bearish on the USD than the consensus”, compared to other market predictions.