EUR/USD to retest parity over the coming months – Goldman Sachs

In the view of economists at Goldman Sachs, the Federal Reserve is set to hike rates by 50 basis points at the next meeting. Regarding EUR/USD, the pair is expected to retest parity.

50bps most likely at next FOMC meeting

“We still think a step down to 50 bps is most likely at the next meeting, but see risks that rate hikes could be more frontloaded. But, with the market still pricing cuts next year, the bottom line is that we still see upside risks to inflation and policy pricing over the next few months." 

“Overall, we continue to see upside risks to real yields in the US, and downside risks for the ECB. As a result, we think EUR/USD can retest parity in the months ahead.”