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Morgan Stanley forecasts EUR/USD to reach 1.23 by spring before falling - Investing.com | FX Bank Forecast

28 investment banks see EUR/USD at 1.1736 by Dec 2026

View the live EUR/USD forecast

GOOGLE NEWS · EUR/USDg10 fx

Morgan Stanley forecasts EUR/USD to reach 1.23 by spring before falling - Investing.com

2025-11-24 08:00Z

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At a Glance

Morgan Stanley projects that the EUR/USD pair could rise to 1.23 by this spring before experiencing a decline. This forecast aligns with a broader positive sentiment among several financial institutions, indicating a potential upward trend in the currency's value in the short term.

Key Takeaways

01Morgan Stanley projects the EUR/USD to rise to 1.23 by spring, suggesting bullish sentiment.
02The consensus for March 2026 among firms indicates an average target of 1.1800, suggesting anticipation of euro appreciation.
03Long-term expectations diverge as Morgan Stanley foresees a drop to 1.1600 by December 2026.

Full Analysis

What the desk is arguing

Morgan Stanley's prediction of EUR/USD reaching 1.23 by spring reflects their bullish stance on the euro against the US dollar. Given the current spot rate at 1.1500, this indicates a considerable appreciation within a short timeline, suggesting significant market shifts driven by macroeconomic factors.

In support of this view, various firms have also set targets that reflect a similar upward trend. Our own consensus median for March 2026 stands at 1.1800, indicating a collective expectation for the euro to strengthen, albeit with a wider variation among different institutions. The desk is implicitly rejecting any notion of sustained weakness in the euro over this period, suggesting that current market dynamics favor an appreciation.

Where it sits in our coverage

The consensus forecast for EUR/USD shows a median target of 1.1800 for March 2026, with a range of 1.1700 to 1.2000, suggesting an overall bullish market sentiment. This aligns with Morgan Stanley's projections that envision the euro climbing sharply short-term while diverging slightly in longer-term expectations, as they predict a drop to 1.1600 by December 2026.

Specific firms' December 2026 targets include: - JPMorgan: 1.2000 - Goldman: 1.2500 - Deutsche Bank: 1.2500

How other firms see it

While Morgan Stanley's view is aligned with the overall positive sentiment, MUFG has a more cautious outlook, with their forecast showing a marginally lower target of 1.2400 for December 2026.

Several institutions appear to align with Morgan Stanley: - Goldman with a December target of 1.2500 - Deutsche Bank at 1.2500

Both of these forecasts reinforce the general bullish environment anticipated for EUR/USD despite potential future adjustments.

Market Implications

An anticipated rise in EUR/USD may encourage risk-on sentiment, impacting dollar-denominated assets and prompting investor reallocations towards eurozone equities and bonds. This could also affect the European Central Bank's response to inflationary pressures as the euro strengthens.

EUR/USD — All Desk Targets

28 desks

Firm	Stance	YE 2027	vs Cons.
Goldman Sachs	Bearish	1.1200	-4.7%
UOB	Neutral	1.1450	-2.6%
Citi	Bearish	1.1000	-6.4%

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GOOGLE NEWS · EUR/USD2025-11-24