MUFG Bank analysts consider the euro's growth to be limited until the end of the year

According to the forecasts of MUFG Bank strategists, the level of the eurozone interest rate will reach 2.75%, which will be the peak. Thus, the growth of the euro will be limited. 

On December 15, it will become clearer whether the European Central Bank (ECB) will raise the interest rate further. However, it’s predicted that the peak will be reached as early as the first quarter of 2023.

A balance sheet policy update combined with further quantitative tightening are unlikely to have a strong impact on the euro, as these are expected developments.

The ECB meeting is also expected to be hawkish, as there is a high probability of peak annual inflation in the eurozone. On the other hand, despite a possible interest rate increase to 2.75% next year, the exchange rate growth or rate hike are unlikely to happen at the moment.