EUR/USD to have a chance to get back closer to the pandemic peak level – SocGen

EUR/USD is currently stuck in a range. Economists at Société Générale analyze the pair’s outlook.

More ECB than Fed tightening in H2

We expect more ECB than Fed tightening in H2, Fed easing in H1 2023 as the US slips into a mild recession, and EUR/USD to have a chance to get back closer to the pandemic peak level (1.23, Jan 2021). 

The biggest risk is that we stay in a much narrower range, i.e., EUR/USD meanders in a 1.05-1.15 range for the foreseeable future, in the face of a synchronised global slowdown.