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

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.