Mitsubishi UFJ: Europe and the United States may fall to parity in the first quarter of next year, but it is difficult to sustain. There is hope for a rebound in the second half of the year.

On December 23, Jinshi Data, Derek Halpenny of Mitsubishi UFJ Bank, said in a report that the euro could fall to parity with the US dollar in the first quarter of 2025, but it is unlikely to remain at this level for a long time. He said that the potential fall of the euro in the short term may be driven by the expectation of the Fed’s pause in interest rate cuts, but in the second half of 2025, the euro should rebound moderately. The euro area faces the possibility of US tariffs, but it is expected that the economic rise in 2025 will improve slightly. “Therefore, we believe that from the current level, there is quite limited space for large-scale and sustained dumping of the euro against the US dollar.”