Euro to rise to $1.22 in a year, predicts Danske Bank

Published 05/05/2025, 12:20
© Reuters.

Investing.com -- Danske Bank (CSE:DANSKE) has predicted that the euro will appreciate to $1.22 from its current value of $1.1340 within the next 12 months. This forecast comes as the U.S. Federal Reserve is expected to resume cutting interest rates, which could weaken the dollar.

The bank’s analysts anticipate 125 basis points in U.S. rate cuts by June 2026 due to the impact of President Trump’s tariff policies on the economy. According to Danske Bank, these cuts are likely to start from next month.

The analysts note that by June and July, the Federal Reserve will likely have much more clarity on both the final level of China tariffs as well as the future of the other ’reciprocal’ tariffs.

Despite the anticipated rate cuts, the Federal Reserve is expected to leave rates unchanged this Wednesday, with Danske Bank stating that it’s unlikely the Fed will commit to rate cuts at this stage.

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