Bank Of America Euro To Dollar Forecast: End-2026 EUR/USD At 1.22 - Exchange Rates Org UK

What the desk is arguing

BofA's call for EUR/USD at 1.22 by end-2026 reflects a view that the euro will grind higher as the ECB and Fed converge on policy rates, reducing the interest rate advantage of the dollar. This forecast aligns with the consensus median among major banks but is less bullish than some peers.

The bank likely expects a slow recovery in eurozone growth and a normalization of risk appetite, supporting the euro over the medium term. However, the near-term path may be bumpy given sticky core inflation and geopolitical uncertainties.

By sticking with 1.22, BofA implicitly rejects both a sharply higher scenario (e.g., Goldman's 1.25) and a renewed dollar strength narrative that would push EUR/USD back toward parity.

Where it sits in our coverage

Our consensus median for end-2026 EUR/USD is exactly 1.22, with a firm spread ranging from Morgan Stanley's bearish 1.16 to Goldman's bullish 1.25. BofA's forecast fits squarely at the median, implying it expects a moderate appreciation from the current spot around 1.15.

Within the consensus, several firms cluster near the median: * ING: 1.22 * MUFG: 1.24 * Deutsche Bank: 1.25 * Barclays: 1.21

Our recent research highlights that spot is trading about 3.87% below the end-2026 consensus, suggesting the market may be pricing in a more pessimistic outlook than the banks collectively project.

How other firms see it

Goldman and Deutsche Bank are more bullish than BofA, each targeting 1.25 by end-2026, implying a faster or larger euro rally. MUFG at 1.24 is also on the bullish side.

On the contrary side, Morgan Stanley stands out with a bearish 1.16 target, well below consensus, reflecting a view that the dollar may remain strong or the euro faces structural headwinds. Barclays at 1.21 and JPMorgan at 1.20 are modestly below BofA but still above spot.