MUFG: EUR/USD could test parity in 2025 before modest recovery ...Middle East

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MUFG: EUR/USD could test parity in 2025 before modest recovery
MUFG expects the euro to remain under pressure in 2025, driven by anticipated U.S. trade policies and geopolitical tensions, with EUR/USD potentially testing parity before staging a modest recovery.Key Points:Election Impact: The euro fell sharply following Donald Trump’s election victory, with markets bracing for aggressive trade, immigration, and fiscal policies.Tariff Risks: U.S. trade tariff actions are expected to dominate FX dynamics in early 2025, with the euro particularly vulnerable given the euro-zone’s significant trade surplus with the U.S.The U.S.-euro-zone trade deficit widened from $158bn in 2019 to $196bn by September 2024.Geopolitical Pressures:Trump may leverage the euro-zo

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