According to research by JPMorgan, the euro may maintain parity with the US dollar in the coming quarters.

The investment bank stated that the Republican Party's "sweeping victory" in the election is the most likely potential outcome for a bullish outlook on the US dollar, and strategists maintain their recommendation to "short" the euro.

Morgan Stanley analyst Patrick R Locke said, "We maintain a long position in the US dollar and expect US policies to become clear soon, including the realization of tariff risks and more specific fiscal ambitions. We recommend investors sell the euro against the US dollar directly

The market is highly concerned about the further development of the upcoming US government, as these should mark the policy framework.

Trump has stated his intention to take swift action and appoint controversial figures to key positions to ensure that his agenda is implemented in the shortest possible time.

Morgan Stanley foreign exchange strategist Meera Chandan said, "Tariffs and fiscal policies remain the main transmission channels through which the US election affects global foreign exchange. Now, at least from a market perspective, the tariff channel may be activated

She explained that the results of the 'red sweep' amplified the 'exceptionalism' of the US dollar on multiple channels. No other currency has the advantages of the US dollar: excellent growth and stock market, higher returns, defensive properties. Even without official tariff announcements, the emotional impact on other countries could be significant and ultimately strengthen the US dollar.

The strategist also believes that the actions of the European Central Bank will assist in achieving parity between the euro and the US dollar, and the central bank will further relax policies to support the economy.

JPMorgan predicts that the EUR/USD will fall to 1.00-1.02 in the coming quarters.

EUR/USD daily chart