EUR/USD unlikely to test last year’s low of 0.95 – ANZ

EUR/USD has retreated from a high of 1.12 in mid-July to levels below 1.06. Economists at ANZ Bank analyze the pair’s outlook outlook.

Better prospects in 2024

Rising commodity prices if sustained will add another blow to the EA’s economy. As net importers of energy, higher energy prices will impact the EA’s balance of payments negatively. While we think this will add to downside pressure on the EUR, it is unlikely the EUR/USD will test last year’s low of 0.95, as local storage facilities are better stocked for Europe’s coming winter.

Lack of impetus from rates and growth relative to the US will likely limit how far the EUR/USD can rally for the rest of 2023.

Looking ahead, we are more optimistic on the pair in 2024, as US economic resilience moderates.