1.1700: Euro hits three-month highs as US Bond buyback plan crushes the US Dollar
The Euro has surged to three-month highs, hitting 1.1700, as recent announcements regarding the US bond buyback plan dampen confidence in the US Dollar. The market is interpreting this move as a potential signal of easing monetary policy, which raises concerns over the strength of the greenback. With the EUR/USD now trading firmly above the 1.1600 mark, the outlook for the Euro has shifted significantly, positioning it favorably against a weakening Dollar amidst ongoing geopolitical uncertainties.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1700, with a range set between 1.1200 and 1.2000 across the firms. Notably, RBC and Deutsche Bank align with the headline figure, projecting 1.1700 and 1.1800 respectively for March 2026, while firms like MUFG and Morgan Stanley anticipate higher targets in the coming months.
How firms align
RBC has targeted 1.1700 for March 2026, closely matching the current market trend, while Deutsche Bank holds a slightly more bullish view with 1.1800. In contrast, firms such as Lloyds are more cautious, targeting 1.1331. Our research provides deeper insights, particularly in /research/eurusd-ecb-rate-path-2026-08-20, where the EUR/USD consensus reflection aligns with the current momentum.
What the data shows
Recent forecast revisions indicate a growing optimism among analysts, with Deutsche Bank upgrading its March 2026 target to 1.1800. Our published research highlights a week-on-week consensus at 1.1677, suggesting market expectations are aligning closely with the current trends shown in the spot rates.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Euro strengthens to 1.1700 as US bond buyback plans weaken USD.
- 02Focus on geopolitical risks and central bank signals as potential volatility factors.
- 03Keep an eye on upcoming ECB statements for further Euro bullish momentum.
Market implications
Traders should monitor the 1.1700 level closely, as it serves as a new psychological barrier. Any shift beyond this point could indicate sustained Euro strength. Additionally, upcoming ECB meetings will be critical to gauge future policy directions.
Risks to this view
Should US economic indicators show unexpected strength, or if inflation prompts a more hawkish stance from the Federal Reserve, the current bullish view on the Euro could reverse. Specifically, stronger than expected employment data could re-energize the Dollar.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.65
Sources & References
How we cover this story
Other coverage on this pair
US treasury bond surprise drives Gold and EUR/USD higher. Crude Oil elevated [Video]
Unexpected Treasury weakness pressures USD duration positioning and reduces carry appeal, likely benefiting EUR/USD in risk-on environment.
Euro: Upside bias targets 1.1725 against US Dollar – UOB
UOB technical bias points to EUR/USD resistance near 1.1725; relevant for positioning ahead of key economic data or policy signals that could validate or challenge this directional view.
EUR/USD Price Forecast: Doubling US bond-buying plan opens way for 1.1800
Expansion of US bond purchases signals sustained Fed accommodation, supporting USD strength and potentially pushing EUR/USD toward 1.1800 support.