EUR/USD: Immediate headwinds to persist through early Q4 2023 – CIBC

A 3% slide versus the USD represents the worst EUR performance in four quarters. Economists at CIBC Capital Markets analyze EUR/USD outlook.

Politics and weather are the immediate Euro headwinds

As macro headwinds show no signs of immediate easing, we anticipate scope for additional positioning for EUR downside.

We can expect the ECB to continue to drain liquidity out of the system across 2024, containing EUR downside. However, we can also expect immediate EUR headwinds to persist through early Q4 2023, not least in view of ongoing political risks into upcoming elections and the weather.

EUR/USD – Q4 2023: 1.03 | Q1 2024: 1.05