EUR/USD to reach 1.20 level as UBS forecasts weaker dollar ahead - Investing.com
At a Glance
UBS's recent forecast positions the EUR/USD at 1.20 as the dollar is expected to weaken. This forecast aligns with a general bullish consensus toward the euro, underpinned by recent signals of a dovish shift from the Fed and improvements in Eurozone economic data.
Key Takeaways
Full Analysis
What the desk is arguing
The argument for EUR/USD climbing towards the 1.20 level relies heavily on anticipated dollar weakness in the coming months. UBS highlights that the combination of a more accommodative Federal Reserve policy and positive momentum in the Eurozone could catalyze a shift in the currency pair toward this significant level.
Additionally, the current trading environment shows strong consensus forecasts from major banks which substantiate this bullish narrative. A number of firms, including Morgan Stanley and ING, have recently raised their price targets for EUR/USD, suggesting broader market alignment with UBS's bullish outlook.
Where it sits in our coverage
Currently, our consensus target for EUR/USD stands at 1.1800 for March 2026, with a range observed between 1.1700 and 1.2000. This outlook is closely aligned with UBS’s view for a weaker dollar, underscoring a general consensus among firms that EUR/USD has growth potential.
Specific firm targets for December 2026 illustrate this bullish trend:
- JPMorgan: 1.2000
- Goldman: 1.2500
- Deutsche Bank: 1.2500
How other firms see it
While UBS's optimistic outlook resonates with many in the market, certain firms remain more cautious. For instance, BofA has projected the EUR/USD at a lower target in the same timeframe due to ongoing uncertainties in economic recovery dynamics.
Overall, the prevailing trend suggests a consensus leaning toward further euro appreciation, though some notable firms emphasize the potential for dollar resilience in their outlooks.
Market Implications
If the EUR/USD strengthens toward the 1.20 mark, it could lead to shifts in currency trading strategies and influence broader market sentiment toward risk assets in the Eurozone. A sustained euro appreciation may also challenge European exporters and impact monetary policy considerations within the ECB.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 1.1200 |
UOB | Neutral | 1.1450 |
Citi | Bearish | 1.1000 |
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