ING Euro To Dollar Forecast: EUR/USD Tipped At 1.22 In 12 Months - Exchange Rates UK
At a Glance
ING forecasts EUR/USD at 1.22 in 12 months, aligning with consensus but above current spot of 1.1500. The call reflects expectations of ECB policy divergence narrowing and eurozone fiscal stimulus, but risks include US exceptionalism and tariff escalation.
Key Takeaways
- 01ING forecasts EUR/USD at 1.22 in 12 months, aligning with the consensus median of 1.22.
- 02Spot at 1.1500 is 3.87% below consensus, implying significant expected appreciation.
- 03Morgan Stanley's 1.16 target is the main contrarian view, warning of persistent US dollar strength.
Full Analysis
What the desk is arguing
ING revises its EUR/USD forecast to 1.22 in 12 months, joining the consensus view that the euro will strengthen from current levels. The bank sees the pair recovering as the ECB reaches peak hawkishness and the Fed begins to ease, narrowing interest rate differentials. ING also points to improving eurozone growth prospects, supported by fiscal spending and resilient domestic demand.
This bullish view rejects the bearish narrative that the euro is structurally weak. It implicitly argues that the current discount to fair value will close as the market reprices ECB policy and the US fiscal outlook deteriorates. The firm's forecast sits near the middle of the consensus range, suggesting a balanced risk-reward for long positions.
Where it sits in our coverage
Our EUR/USD consensus for Dec-26 is 1.2200, based on the median of eight major bank forecasts. That's exactly where ING sits, making their call a consensus-aligned stance. The range of forecasts is wide, from 1.1600 (Morgan Stanley) to 1.2500 (Goldman Sachs), reflecting deep uncertainty about the medium-term trajectory. Spot at 1.1500 trades well below any firm's Dec-26 target, implying a significant expected appreciation.
Specific firm targets for Dec-26 include: - Goldman Sachs: 1.2500 - MUFG: 1.2400 - Deutsche Bank: 1.2500 - ING: 1.2200 - BofA: 1.2200 - Barclays: 1.2100 - JPMorgan: 1.2000 - Morgan Stanley: 1.1600
How other firms see it
Most banks are aligned with ING's bullish view, though with varying conviction. Goldman Sachs and Deutsche Bank are more aggressive at 1.25, while MUFG sits at 1.24. These firms likely share the view that EUR weakness is overdone and a reversion to fair value is due. JPMorgan at 1.20 and Barclays at 1.21 are more cautious but still above spot.
On the contrary side, Morgan Stanley stands out with a Dec-26 target of just 1.1600, implying EUR essentially flat from current levels. They argue that US exceptionalism and tariff risks will persist, capping EUR/USD gains. This minority bearish view presents a key risk to the consensus bullish narrative, and traders should watch for any shift in Morgan Stanley's stance as it could signal a broader change in sentiment.
Market Implications
The consensus bullish EUR/USD view supports a long bias, but the wide range (1.16-1.25) suggests high uncertainty. The gap between spot and consensus may attract carry and valuation traders, but execution requires patience. A close above 1.20 could trigger momentum buying.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Neutral | 1.1450 |
Citi | Bearish | 1.1000 |
MUFG | Bullish | 1.1800 |
From the original
ING Euro To Dollar Forecast: EUR/USD Tipped At 1.22 In 12 Months Exchange Rates UK
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