Experts warned of various threats to the EUR/USD outlook in 2024. The ECB's interest rate outlook was unable to provide support.

EUR/USD has performed quite well over the past two months, even testing the 1.1100 threshold again in Thursday's trading (28/December). However, experts warn of multiple threats to the EUR/USD outlook next year.

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Experts at Morgan Stanley have listed "short EUR/USD" as one of the top trading ideas for 2024. They think the Eurozone will suffer a technical recession, so the central banks of Europe, Sweden, and the UK will start cutting interest rates early.

"Unattractive (economic) growth and falling interest rates weigh on these currencies, with EUR/USD returning to parity in the first quarter of 2024 and staying around the 1.00 level for most of the year (2024)," Morgan Stanley said.

Danske Bank recommends EUR/USD traders to "buy on dips" in the short term but warns that the outlook is weaker in the longer term. They expect EUR/USD to rise at the start of the year, then drop to 1.10 in the next three months, 1.07 in the next six months, and 1.05 in twelve months.

HSBC is even more pessimistic. Its forecast slopes to 1.06 by the end of Q1/2024, 1.04 by mid-year, and 1.02 by the end of the third and fourth quarters.

The consensus of analysts is bearish about the future of EUR/USD, including those who are skeptical about the outlook for the US Dollar in general. Amundi expects EUR/USD to slide to 1.09 by mid-2024. Meanwhile, Credit Agricole projects EUR/USD to drop to 1.07 in the same time frame.

According to Credit Agricole, Eurozone inflation will remain high and the region will not go into recession. They expect the ECB to keep interest rates high, and then only start cutting rates in September (slower than current market expectations). But all these assumptions still won't be able to lift the Euro next year.