JPMorgan: The average exchange rate between Europe and the United States in the first half of next year is 0.95

Analysts at JPMorgan Chase predict that the average level of the euro against the dollar in the first half of next year will be 0.9500. If the geopolitical situation does not downgrade, Europe and the United States may also drop to 0.9000.

The Federal Reserve and the European Central Bank are expected to pause rate hikes in the first quarter of 2023, with rates at 5% and 2.5%, respectively. A mild U.S. recession in late 2023 will hamper a recovery in the euro area. A pause in Fed rate hikes is not a sufficient condition for a rebound in Europe and the United States. The trading strategy is tactical, with the possibility of continued improvement in regional growth momentum or a ceasefire between Russia and Ukraine.