UBS strategists say that the EUR/USD is expected to rise above its current level by the end of the year.

The background of this prediction: With the release of the US election results, speculation in the market that the euro may fall to parity against the US dollar continues to increase.

UBS strategist Vassili Serebriakov said, "Although we are optimistic about the long-term strength of the US dollar, we still believe that the market will mainly maintain the existing volatility range before the end of this year, and will not break through to create new highs for the US dollar

He acknowledged that recent trends have been positive for the US dollar, but pointed out that sustained range breaks in the global foreign exchange market over the past two years are still relatively rare. To achieve this, the US dollar must continue to be driven by positive news.

Serebriakov added that at least until Trump officially takes office, the flow of positive news about the US dollar may decrease, as highlighted by the recent battle over the nomination of the Treasury Secretary. In addition, he also pointed out that the breakeven inflation rate in the fixed income market has played an important role in driving up nominal returns in the United States. However, the actual spread provides less support for the US dollar than the nominal spread.

Serebriakov said that the market seems to have reached a ceiling on the pricing of Fed rate cuts for the next 12 to 15 months, and if there are any signs of weakness in US data, the market may turn around.

Serebriakov said, "Based on these reasons, we believe that in the short term, it is more likely to be market consolidation rather than further strengthening of the US dollar. We expect the euro to close at 1.07 against the US dollar by the end of the year

At the same time, strategists at JPMorgan Chase stated that the Republican Party's "red tide victory" in the election is one of the most favorable potential outcomes for the US dollar. Morgan Stanley strategists still maintain their short recommendation for the euro against the US dollar.

Morgan Stanley analyst Patrick R Locke said, "We continue to hold long positions in the US dollar, including the realization of tariff risks and clearer fiscal plans, as we look forward to the rapid clarification of US policies. Directly short the euro against the US dollar

JPMorgan believes that tariff policies and Trump's fiscal plan remain the main impacts of the US election on the global foreign exchange market; From a market perspective, at least the impact of tariffs may occur.

JPMorgan Chase points out that no other currency has stronger economic growth, higher stock market returns, higher levels of returns, and defensive features like the US dollar. Even without formal tariff announcements, the impact on other countries due to emotional shocks may still be significant, which should ultimately further drive the strength of the US dollar.

JPMorgan predicts that the euro against the US dollar will experience multiple quarters of decline, ultimately reaching a level of 1.00-1.02.

EUR/USD daily chart