Bank of America reiterated its bearish stance on the euro on Wednesday, arguing that the widening growth gap between the US and eurozone, coupled with the risk of tighter Federal Reserve policy, could push the single currency even lower.

BofA said stronger-than-expected US employment data last week reinforced its bearish view, triggering a break of the key EUR/USD uptrend line. Strategists noted they would continue to sell the rally, viewing recent rebounds from the psychologically important $1.15 level as temporary.

"The growth divergence between the US and eurozone is significant and appears to be underpriced by interest rate markets," the bank said.

The eurozone remains particularly vulnerable to energy market shocks due to its reliance on imports, unlike the United States, which is a net energy exporter. High gas prices could create stagflationary pressures even if geopolitical tensions gradually ease.

Strategists warned that expectations of a possible interest rate hike by the European Central Bank will not necessarily support the euro, given the bloc's weaker economic backdrop and exposure to rising energy prices amid tensions in the Middle East.

BofA also noted that while markets have begun pricing in the possibility of a Fed rate hike, most economists do not yet forecast any tightening by the US central bank.

The euro last traded near $1.15 after a sharp decline on Monday following the release of US employment data last week.