Bank of America economists said in a report that as the Fed turns to rate cuts, but the pace of rate cuts will be slower than previously expected, the dollar may remain somewhat strong. They expect the euro to the dollar to close at 1.12 this year. Given the sustained inflation in the United States and the "mild easing cycle," Bank of America expects the euro to the dollar to reach 1.17 by the end of 2025, previously predicted to be 1.20. Economists said they remain more bearish on the dollar than the market consensus.
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Bank of America: USD strength expected to continue for a longer period of time
Bank of America economists said in a report that as the Fed turns to rate cuts, but the pace of rate cuts will be slower than previously expected, the dollar may remain somewhat strong. They expect the euro to the dollar to close at 1.12 this year. Given the sustained inflation in the United States and the "mild easing cycle," Bank of America expects the euro to the dollar to reach 1.17 by the end of 2025, previously predicted to be 1.20. Economists said they remain more bearish on the dollar than the market consensus.