MUFG Euro To Dollar Forecast: EUR/USD At 1.26 In Next 12 Months - Exchange Rates UK

What the desk is arguing

The desk acknowledges MUFG's optimistic stance on the EUR/USD forecast, which suggests significant appreciation from the current spot of 1.1500 to 1.26 within 12 months. Given the recent trends in Eurozone data and potential stabilization in the global economy, such a trajectory could be plausible if economic fundamentals align favorably.

Supporting evidence from recent consensus projections indicates that while many firms are revisiting their EUR/USD targets upward, MUFG's target remains notably higher than the prevailing market expectations, signaling an anticipated divergence in performance.

The desk implicitly challenges the notion that the EUR/USD will remain limited in its growth potential, suggesting that factors such as changing monetary policy actions by the ECB and improved economic data blooms in Europe could foster a more robust currency environment than currently predicted.

Where it sits in our coverage

Our current consensus target for EUR/USD is 1.2200 by December 2026, with a tight spread among major firms ranging from 1.1700 to 1.2500. This positions MUFG's forecast substantially above the median, suggesting a more aggressive recovery in the Eurozone than is commonly anticipated.

Specific targets from select firms demonstrate this discrepancy:

• Goldman: Dec26 1.2500
• Deutsche Bank: Dec26 1.2500
• MUFJ: Dec26 1.2400

How other firms see it

The overall sentiment regarding the EUR/USD is mixed, with several firms agreeing on a more cautious approach while a few align with MUFG's optimistic forecast. Notable firms that align include:

• Goldman (Dec26 target 1.2500)
• Deutsche Bank (Dec26 target 1.2500)

Conversely, firms like JPMorgan and BofA hold more conservative views with targets of 1.2000 and 1.2200 respectively, suggesting that they foresee limitations to the euro's upward trajectory in the near term.