Bank of America just raised its EUR/USD forecast - Investing.com

What the desk is arguing

The shift in Bank of America's EUR/USD forecast signals a potential turning point for the euro as it seeks to strengthen against the dollar. The updated targets of 1.1700 for March 2026, 1.1900 for June, and 1.2200 for December reflect a broader belief in the resilience of the Eurozone economy, particularly in light of enhanced economic data and supportive monetary policy.

Furthermore, this revision positions BofA's projections towards the lower end of the analyst consensus, suggesting that while others may anticipate further appreciation, the bank is maintaining a conservative approach. This hints at possible underlying concerns that have yet to fully manifest within the broader market sentiment, including geopolitical uncertainties and variations in central bank policies.

Where it sits in our coverage

Currently, the EUR/USD spot price stands at 1.1500, while our aggregated consensus target for March 2026 is pegged at 1.1800, within a range of 1.1700 to 1.2000. Bank of America's forecast implies a divergence from the prevailing analyst consensus, which suggests a more bullish outlook for the currency pair over the medium-term.

Notably, major firms have set higher targets for December 2026, including: - JPMorgan: 1.2000 - Goldman Sachs: 1.2500 - Deutsche Bank: 1.2500

How other firms see it

While BofA adopts a more tempered perspective on EUR/USD, several other firms maintain an optimistic view. Goldman Sachs and Morgan Stanley are notably aligned with the prevailing bullish sentiment, pushing their targets higher amidst economic rebounds in the Eurozone.

• Goldman Sachs: 1.2500 (Dec26)
• Morgan Stanley: 1.2300 (Jun26)
• JPMorgan: 1.2000 (Dec26)

In contrast, BofA's lower target suggests a cautious outlook, reflecting concerns that other firms may not be accounting for adequately.