Excerpt via Capital Economics on their EUR/USD view:

• We expect the euro to weaken significantly as a result of further deterioration in economic activity

USD to strengthen, says Capital Eco, citing its pessimistic outlook for major advanced market economies (including the US and the Eurozone) suggesting the USD will strengthen against most FX on risk-off sentiment.

• we predict that the euro will fall back to parity by the end of 2023

Another reason why Capital Eco like USD is the AI/tech boom:

• “We think this is increasingly reminiscent of the dotcom era of the late 1990s, and we now expect a similar bubble to form in the US stock market in the coming years…the dotcom era was accompanied by a substantial rise in the dollar, fueled in part by capital inflows related to the stock boom markets. So if we’re right that the AI ​​euphoria will continue, it could help the dollar bounce back – and perhaps stay stronger for longer than we’re currently predicting.”