ING Groep NV's Patrick Gavyn stated in a report that the EUR/USD exchange rate could potentially rise to 1.20 by the end of 2025 if the Federal Reserve chooses to implement a series of interest rate cuts.

Fed Chair Jerome Powell indicated during his speech at the Jackson Hole Global Central Banking Symposium last Friday that "changing risks may necessitate policy adjustments," opening the door for a September rate cut.

ING Groep NV forecasts that the EUR/USD exchange rate will reach 1.17 by the end of this quarter, while expecting that prospects for further subsequent rate cuts will drive the euro exchange rate even higher.

According to London Stock Exchange Group (LSEG) data, U.S. money markets are currently pricing in an 84% probability of a Fed rate cut next month, and have fully factored in expectations for two 25 basis point cuts by the Fed before the end of December.