Deutsche Bank Euro To Dollar Forecast: EUR/USD Tipped At 1.25 By End 2026 - Exchange Rates Org UK

What the desk is arguing

The desk argues that Deutsche Bank's forecast of EUR/USD reaching 1.25 by the end of 2026 is ambitious but not impossible, given the current economic trajectories in both the Eurozone and the U.S. This target suggests confidence in potential monetary policy changes from the European Central Bank and addressing inflation variances that could favor the euro.

Supporting this view, current median forecasts indicate a steady upward trend for the euro against the dollar, suggesting a consensus leaning towards euro appreciation. This aligns with recent revisions by several major banks, which have generally adjusted their forecasts upward, highlighting a potential gap between current spot prices and anticipated longer-term values.

Where it sits in our coverage

Our consensus target for EUR/USD stands at 1.2200 for December 2026, with a range between 1.1700 and 1.2500 across various firms, indicating a notable divergence from Deutsche Bank's projection. This shows a mix of optimism and caution among analysts, with an expectation that while the euro may appreciate, some firms are less willing to forecast a rise as significant as 1.25.

Specific targets from our coverage include: - JPMorgan: 1.2000 - Goldman: 1.2500 - MUFG: 1.2400 These projections illustrate varying degrees of confidence in the euro's rise, with Deutsche Bank emphasizing a more aggressive bullish scenario.

How other firms see it

Several firms maintain forecasts that lean towards more conservative estimates compared to Deutsche Bank's target. For instance, Goldman and MUFG have set targets of 1.2500 and 1.2400, respectively, while Morgan Stanley anticipates a decline to 1.1600 by December 2026.

In terms of alignment, banks providing a bullish perspective include: - Goldman: 1.2500 for Dec 26 - MUFG: 1.2400 for Dec 26 Whereas firms like Morgan Stanley hold a contrary position with a forecast at 1.1600, suggesting a more cautious outlook.