UBS Euro To Dollar Forecast: EUR/USD At 1.20 By End-2026, Early 2027 - Exchange Rates Org UK
At a Glance
UBS's recent projection for EUR/USD to reach 1.20 by the end of 2026 or early 2027 builds a case that aligns with a somewhat optimistic outlook for the Euro against the Dollar. This perspective is contrasted by a consensus among major banks forecasting more gradual appreciation, suggesting differing views on the pace of economic recovery and monetary policy adjustments in the Eurozone versus the US.
Key Takeaways
- 01UBS projects EUR/USD at 1.20 by end-2026, reflecting an optimistic outlook for Euro appreciation.
- 02The current consensus median for EUR/USD suggests a more gradual appreciation, with targets ranging from 1.1700 to 1.2500.
- 03Divergences in forecasts indicate varying expectations about economic recovery and central bank policy impact on exchange rates.
Full Analysis
What the desk is arguing
UBS expects the EUR/USD exchange rate to climb to 1.20 by late 2026 or early 2027, indicating a belief in the Euro's strengthening position relative to the Dollar over the medium term. This projection reflects anticipated shifts in economic conditions and central bank policies, which may favor the Euro in a potentially stabilizing global environment.
Supporting UBS's view, our internal coverage shows that the consensus median for EUR/USD across several firms rises from 1.1800 in March 2026 to 1.2200 by the end of the year, suggesting a steadily improving outlook but without the decisive leap to 1.20 that UBS anticipates. The contrasting targets indicate that while there is general agreement on Euro strength, expectations about the timing and extent of that strength vary significantly among banks.
Where it sits in our coverage
Currently, our consensus target for EUR/USD is set at 1.2200 for December 2026, with firms' forecasts ranging from 1.1700 to 1.2500. This divergence from UBS's more aggressive target implies that, while there is optimism about the Euro's appreciation, the broader market consensus remains slightly more tempered.
Highlighted targets from notable firms include:
- JPMorgan: 1.2000
- Goldman: 1.2500
- Morgan Stanley: 1.1600
How other firms see it
Several other firms present forecasts that align with the moderate consensus rather than UBS's optimistic stance. For instance, Deutsche Bank and MUFG project rates that suggest steady but cautious appreciation of the Euro.
- Deutsche Bank: 1.2500 for Dec-26
- MUFG: 1.2400 for Dec-26
Thus, while UBS is optimistic about the Euro's performance, other market players harbor more cautious long-term expectations.
Market Implications
If UBS's predictions hold true, it could lead to significant shifts in currency positioning and risk sentiment, prompting traders to reassess their Euro exposure. Furthermore, stronger than expected Euro performance may alter expectations around ECB policy and US Federal Reserve actions.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 1.1200 |
UOB | Neutral | 1.1450 |
Citi | Bearish | 1.1000 |
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