Bank of Canada: Euro/USD will decline in early 2025, but will not fall below parity.

On December 18, Jin10 Data reported that analysts at Royal Bank of Canada’s Capital Market stated in a report that due to the threat of US tariffs, the euro against the dollar may fall in early 2025, but it is unlikely to fall below parity. The euro is expected to fall to 1.02 against the dollar in the first half of 2025, and then rebound to 1.05 at the end of 2025. The possibility of falling below parity cannot be ruled out, but it will not last. Trump’s policy proposals will cause inflation, but he may be cautious about excessive compression of disposable income. It is expected that the European Central Bank will not reduce interest rates significantly as the market currently expects, thereby further limiting the fall of the euro.