MUFG Bank reveals its expectations for the performance of the euro-dollar in the first quarter of 2025.

On Tuesday, MUFG Bank issued a research note discussing the bank's forecasts regarding the performance of the major currency pair Euro-Dollar during the first quarterly period of next year.

In this regard, the Japanese investment bank predicts that the euro will continue to decline against the US dollar, potentially approaching parity with the dollar in the first quarter of 2025.

Furthermore, MUFG Bank clarified that these negative forecasts for the Euro-Dollar pair are attributed to the macroeconomic divergence between the Eurozone and the United States, which is a key factor contributing to the euro's weakness.

However, analysts at the Japanese bank believe that this economic divergence has already been priced into current market trading, limiting the likelihood of significant additional declines.

As these economic disparities begin to fade in the second half of 2025, the euro is expected to regain some of its strength, meaning the Euro-Dollar pair may recover.