Forecast for EUR (Euro) in 2024 - Exiap (2024)

• The decisions that the European Central Bank takes move the Euro. When the central bank looks to raise interest rates, the Euro rises. The ECB will consider increasing interest rates when the economy is strong.,
• Similarly, when the ECB looks to lower interest rates when economic growth sows, the Euro falls.
• Politics are also very important for the euro. Should a party which opposes the euro currency gain power, the Euro could fall

1. US Economy

• Germany, France, Italy and Spain represent 75%of the Eurozinr’s $13.3 trillion GDP and Germany and France account for almost 50% of the eurozone’s GDP. The health of these economies influence the value of the Euro.
• After assessing the economy, the central bank decides whether to raise interest rates or not. This decision is key in raising the value of the Euro, or not.

2. Politics

• • Politics can play an important role in influencing the euro. This was clear from the German elections last year.
  • When political uncertainty arises this can pull the value of the Euro lower. On the other hand, periods of political stability across the region buoys the value of the Euro.
  • Brexit has had a bigger impact on the value of the pound than the Euro.

3. Imports and Exports

• The Euro and the US Dollar are the world's most traded currencies.
• The Euro trades inversely to the US Dollar. So when the US Dollar rises in value the Euro often declines and when the US Dollar falls in value the Euro often rises.
• When the US dollar falles, the Euro often rises and vice versa.
• Should the US dollar rise in 2024 then the Euro could fall.

EUR/USD performance in 2024

• Investment banks widely expect the Euro to fall versus the US Dollar next year.
• This is because the Eurozone economic recovery is expected to be slower than the recovery in the US.
• ING forecasts that EUR/USD will fall to 1.10 by the end of 2024.
• Citibank expects the EUR/USD to fall to 1.12 over the next 6-12 months

EUR/GBP performance in 2024

• Analysts at major banks broadly agree that the Euro could fall versus the Euro in 2024 despite ongoing Brexit tensions.
• Should the UK economy outpace the Eurozone in 2024 the Pound could rise further.
• ING expects EUR/GBP to fall to 0.82 by the end of 2024.
• CIBC see EUR/GBP falling to 0.83

EUR/NZD

• The economic recovery from the pandemic in New Zealand has been particularly strong despite another COVID hit in 2024. The New Zealand labour market recovery was notably solid and could continue into 2024.
• A strong labour market and more broadly a strong economic recovery could continue to support the New Zealand dollar in 2024

EUR to INR

• COVID hit the Indian economy hard in the early part of 2024, but the economy is recovering well and could continue to grew solidly in 2024.
• Should the Indian economy grew at a faster rate than the economy in Europe, the Indian Rupee could rise against the Euro.

EUR to JPY

• The Japanese yen is a safe haven currency which often performs well when economic or geo-political risks increase.
• There are plenty of potential risks that could play out and boost the yen in 2024. These include revival of COVID lockdowns, US-China political risk and also financial market risk to name a few. Should these risks rise, demand for the yen could rise.
• On the other hand, should global risks decrease, the euro could strengthen versus the yen.

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