Bank Of America Euro To Dollar Forecast: EUR/USD To Target 1.20 By End 2026 - Exchange Rates UK

What the desk is arguing

The desk supports the notion that the euro may strengthen against the dollar, forecasting a stabilization around higher levels as economic conditions evolve. While Bank of America's 2026 target aligns with a bullish outlook, it admits that the pace of appreciation may not meet the more aggressive targets set by other firms, indicating potential for convergence in views over time.

However, the desk implicitly dismisses the notion that current levels will remain stable for the duration of the forecast, instead arguing that macroeconomic factors such as inflation and interest rates will drive the euro higher by 2026 despite the uncertain global landscape.

Where it sits in our coverage

Our current consensus target for EUR/USD by December 2026 stands at 1.2200, with projections ranging from 1.1700 to 1.2500, suggesting that the market broadly expects continued euro appreciation. Bank of America's target of 1.2200 for the same period places it within the upper range of our consensus, indicating a shared optimism despite slightly conservative immediate forecasts.

Key targets from some prominent firms include:

• JPMorgan: 1.2000
• Goldman: 1.2500
• Morgan Stanley: 1.1600

How other firms see it

Several firms align closely with the overall optimistic outlook for the euro, positioning themselves around similar targets for December 2026. Notably, Deutsche Bank and Goldman maintain higher targets, suggesting a more robust optimism about the euro's trajectory.

• Key aligned firms:
• Deutsche Bank: 1.2500
• Goldman: 1.2500
• Barclays: 1.2100

In contrast, BofA’s own targets, while still optimistic, reflect a more cautious stance, especially in the short term, as they focus on slower initial gains before any significant bull run materializes.