EUR/USD Forecast: UBS Predicts Powerful Surge to 1.20 As Dollar Weakens in 2025 - Binance

What the desk is arguing

UBS's prediction for a powerful surge of the EUR/USD to 1.20 in 2025 is supported by a general expectation of dollar weakness as interest rate adjustments play out. The anticipated recovery in the Eurozone is set to enhance the euro's appeal, paralleling the dollar's expected decline as the US navigates potential economic headwinds.

Current market sentiment reflects this outlook, with consensus projections placing the EUR/USD significantly higher than its current spot at 1.1500. Notably, many institutions are increasingly aligning their targets toward this bullish trajectory for the euro against the dollar, underscoring confidence in the euro's relative strength moving forward.

Where it sits in our coverage

Our internal consensus for EUR/USD suggests a target of 1.2200 by December 2026, with varying forecasts from peers indicating a range from 1.1700 to 1.2500. This consensus aligns with UBS's view, reinforcing the notion that the EUR/USD could strengthen considerably in line with their forecast.

Notable targets from key firms include: - JPMorgan: Dec26 target at 1.2000 - Goldman: Dec26 target at 1.2500 - Deutsche Bank: Dec26 target at 1.2500

How other firms see it

Several firms are in agreement with UBS's stance, forecasting strength in the euro against the dollar. For instance, ING and Morgan Stanley also have bullish projections for the EUR/USD, signifying a widespread expectation of euro appreciation.

Conversely, BofA remains comparatively cautious, suggesting a lower target of 1.2200 for December 2026, indicating a more tempered outlook on euro strength amidst potential volatility.