JP Morgan raise their forecasts for AUD, NZD and for USD/JPY (EUR/USD unchanged) - investingLive

What the desk is arguing

JP Morgan's decision to revise their forecasts for AUD, NZD, and USD/JPY while maintaining their EUR/USD projection indicates a differentiated outlook on these currencies, likely based on expected shifts in economic conditions and central bank policies. This divergence reinforces the notion that while some currencies may capitalize on post-pandemic recovery, others may experience relative stability amid fluctuating monetary landscapes.

The updated forecasts for USD/JPY, which see the pair potentially reaching a target of 164 by December 2026, further emphasizes market expectations of a gradual tightening by the Bank of Japan. Conversely, leaving EUR/USD unchanged at 1.1500 nurtures the argument that the Eurozone may lag behind in monetary policy adjustments, which could prolong its relative weakness against a strengthening USD and the currencies of emerging markets.

Where it sits in our coverage

Current consensus for EUR/USD stands at 1.1800 for March 2026, alongside a projected range of 1.1700 to 1.2000. JP Morgan’s unchanged position aligns with this consensus, suggesting that their outlook supports a stable Euro amid potential shifts in other currency dynamics.

In comparison, firms such as Barclays and Deutsche Bank are projecting slightly higher targets for March 2026, indicating their belief in a stronger Euro:

• Barclays: 1.1700
• Deutsche Bank: 1.1800

For JPY forecasts, JP Morgan's target of 164 by December 2026 is considerably higher than the median consensus of 147.5, reflecting a more optimistic view on Japanese monetary policy and economic recovery. Other notable targets include:

• Goldman Sachs: 148.0000
• MUFG: 146.0000
• Morgan Stanley: 140.0000

How other firms see it

While JP Morgan's optimistic stance on JPY appears to stand in contrast to some firms, others like Goldman Sachs and Morgan Stanley provide lower projections, suggesting a more cautious approach. This divergence highlights differing views on the pace and effectiveness of BoJ policies moving forward.

• Goldman Sachs: Bearish on JPY with target of 148.0000 by December 2026.
• Morgan Stanley: Similarly cautious with a December target of 140.0000.