Signal over Noise with Ulrike Hoffmann-Burchardi
At a Glance
The desk interprets recent comments from Ulrike Hoffmann-Burchardi at UBS regarding the contrasting technological and geopolitical landscapes between the U.S. and Europe as a crucial turning point for investors. Per the full note, while Europe experiences a temporary boost from fiscal stimulus in 2026, its long-term growth depends on reclaiming its competitive edge in technological innovation where the U.S. currently leads with a 64% share of global startup funding. This narrative indicates a potential U.S. dollar strength relative to the Euro if the divergence in growth prospects continues to widen.
Key Takeaways
- 01U.S. currently holds a 64% share of global startup funding, underscoring its dominance in tech.
- 02Europe's fiscal stimulus may offer temporary support, but lacks long-term structural changes for growth.
- 03The divergence in innovation and economic strategies may lead to sustained USD strength against the Euro.
- 04Market sentiment appears cautiously aligned with bullish forecasts for the U.S. dollar in the near term.
Full Analysis
What the desk is arguing
The desk believes the insights shared by Hoffmann-Burchardi highlight significant risks to European economic stability as it struggles to keep pace with U.S. advancements. The emphasis on AI as a focal point at Davos illustrates the widening gap between the two economies, with U.S. firms having already established dominance in crucial sectors while European regulation may hinder its own growth potential.
Moreover, Hoffmann-Burchardi's observations on fiscal stimulus suggest a short-term uplift for EU markets, but without structural reforms in innovation, Europe may fail to sustain this momentum. The clear weight of U.S. firms in global markets, as underscored by the 64% representation in the MSCI ACWI, reinforces the likelihood of continued USD strength.
Where it sits in our coverage
Currently, our coverage indicates a consensus target for USD/EUR at 1.075, reflecting a cautious outlook amid the shifts in global economic power dynamics. Specifically, jpmorgan has established a target of 1.10 for March 2026, while bofa holds a more conservative stance with a target of 1.04.
The desk’s interpretation aligns with this consensus range, situating the forecast toward the upper bound, potentially reflecting growing sentiment around U.S. dollar appreciation as Europe navigates its challenges.
How other firms see it
Firms such as jpmorgan and others are aligned with the desk's perspective, emphasizing the potential for USD strength against the Euro based on structural economic discrepancies. In contrast, bofa presents a more cautious outlook, indicating risks associated with overestimating the impact of fiscal policy in Europe.
Relevant currency pairs to monitor will include EUR/USD, reflecting the broader economic trajectory and challenges each region faces. Additionally, keep an eye on U.S. economic data releases that could influence central bank policy and market sentiment as the distinctions between these economies become more pronounced.
Market Implications
Traders should watch for EUR/USD movements, particularly around levels of 1.075. Influential U.S. economic indicators and central bank communications in March could provide further catalysts for the anticipated upward trend of the dollar.
From the original
Tune in at the start of the trading week ahead of the New York opening bell as Ulrike Hoffmann-Burchardi, CIO Americas and Head of Global Equities for UBS Wealth Management, briefs you on what’s the signal, and what’s just noise in the markets. Recorded on 25 January 2026.
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