UBS analysts predict the dollar will weaken less than previously expected in 2025, following its recent strength against rivals and a hawkish stance from the Federal Reserve. While the euro may trade around $1.05 against the dollar in the first half of 2025, risks of a drop toward parity remain due to tariff threats and macroeconomic divergence. However, improvements in Europe's economic backdrop are anticipated in the second half of the year, potentially supporting a recovery in the EUR/USD exchange rate.