Danske Bank: Euro to USD to Rise to 1.22 Within 12 Months

Danske Bank expects the US dollar to come under pressure as the Federal Reserve resumes cutting interest rates, with the euro to US dollar exchange rate rising from the current 1.1340 to 1.22 within the next 12 months. The bank predicts that as the damage from Trump's tariff policies on the economy becomes evident starting next month, the US will cut rates by 125 basis points by June 2026. Analysts at the bank stated in a report, "By June and July, the Fed might have a clearer understanding of the final level of tariffs and future 'reciprocal' tariffs." Danske Bank also expects the Fed to stand still on Wednesday, but is unlikely to commit to rate cuts at this stage.