Synopsis:

Danske Bank anticipates sustained EUR/USD downside through 2025 after Trump’s election win, citing stronger US growth dynamics relative to the eurozone. Near-term focus will shift to upcoming US economic data, but a structurally stronger USD is expected to weigh on EUR/USD over the next two years.

Key Points:

• Political and Economic Drivers: Trump’s win, with Republicans likely controlling Congress, reinforces expectations for policies supportive of US growth, adding pressure on EUR/USD.
• Upcoming Data Focus: Markets are now looking toward the FOMC’s likely 25bps cut, October CPI, and retail sales, with particular attention on US labor market and consumer trends.
• Structural EUR/USD Weakness: Danske forecasts a structurally stronger USD as US growth outpaces the eurozone, likely keeping EUR/USD on a downward path through 2025.

Conclusion:

Danske sees EUR/USD under structural pressure in the coming years, with US economic resilience and favorable policy dynamics driving a stronger USD. This trend supports a sustained EUR/USD downside outlook through 2025, with upcoming data further guiding near-term market adjustments.