Euro finds support as soft US PPI weighs on US Dollar
The Euro has found firm support following softer-than-expected US PPI data, which has implications for future Federal Reserve rate hikes, thereby weighing on the US Dollar. The current spot rate of EUR/USD is at 1.1434, amidst a backdrop suggesting increased bullish sentiment on the Euro as inflation concerns impact the USD's strength. As markets digest the inflation miss, the potential of a more dovish Fed could further bolster the Euro's position in the coming months.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across firms), with the highest target from Commerzbank at 1.1900 and the lowest from Citi at 1.1300. This positioning suggests a general bullish sentiment towards the Euro post-PPI data, aligning with broader market movements.
How firms align
Goldman Sachs and MUFG share a bullish view, both forecasting 1.1800 for March 2026, supporting the belief that the Euro will continue its upward trajectory. Other firms like Scotiabank (1.1734) and Standard Chartered (1.1400) indicate a similar bullish stance, though with varied degrees that reflect differing market perceptions.
What the data shows
Recent forecasts from Goldman Sachs have been revised upward for March 2026 to 1.1800, indicating a market shift towards more bullish expectations. Additionally, our published research details a growing divergence between current prices and consensus, highlighting the Euro's potential to correct upwards as seen in /research/eurusd-ecb-rate-path.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD at 1.1434, riding a wave of bullish sentiment after soft US inflation data.
- 02Market anticipates a dovish Fed, adding pressure to USD and support to EUR.
- 03Look for EUR/USD testing levels of 1.17 as the consensus suggests upward momentum.
- 04Inflation data missed expectations, potentially reshaping monetary policy outlook.
Market implications
Traders should keep an eye on the psychological level of 1.15 for EUR/USD as it stands just above current spot levels. With our consensus target at 1.1700, a positive surprise in Eurozone data or a hawkish shift from the Fed could push the pair higher. Upcoming inflation reports will be crucial in determining market direction.
Risks to this view
A significant reversal in this bullish view could occur if unexpected hawkish signals emerge from the Federal Reserve, compelling the USD to strengthen. Should upcoming economic data point to greater inflation pressures in the US than anticipated, it could lead to a reevaluation of EUR/USD targets.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.45
Sources & References
How we cover this story
Other coverage on this pair
Euro: Energy risks cap upside against US Dollar – ING
Energy crisis remains structural EUR/USD headwind; supply shocks could force further ECB tightening without offsetting growth gains.
Euro picks up favoured by a weaker US Dollar but remains within previous ranges
EUR/USD strength on USD weakness lacks directional conviction; price consolidation within recent bands suggests limited follow-through potential.
Euro: Range-trading bias around recent highs against US Dollar – UOB
EUR/USD Price Forecast: Bulls remain cautious below 23.6% Fibo. and 1.1470 hurdle
Bank desks on this topic
FX Daily: Benign CPI takes sting out of dollar’s upside
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FX Daily: Dollar upside risks are rising rapidly
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Rates Spark: Room for Warsh to shift the narrative
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G10 FX Talking: Dollar upside looks limited
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Cross-firm research
EUR/USD Consensus vs Spot: Week of July 15, 2026
EUR/USD spot sits at 1.1417, roughly 2.42% below the 28-firm median Dec-26 target of 1.17, with a 0.20 spread separating the most and least bullish desks.
EUR/USD Trades 2.4% Below Consensus as 28 Desks Hold 1.17 Dec-26 Target
EUR/USD spot at 1.1421 sits 2.39% below the 28-firm median Dec-26 target of 1.17, with a 0.20 range separating the most and least bullish desks.
EUR/USD Consensus vs Spot: Week of July 13, 2026
EUR/USD spot sits 3% below the 28-firm Dec-26 median target of 1.1750, exposing a wide consensus-to-market gap that hinges on rate-path assumptions.