Euro rises as US-Iran deal hopes sink US Dollar and Oil
Hopes surrounding a potential US-Iran deal have led to decreased demand for the US Dollar, creating a favorable environment for the Euro to ascend. This backdrop not only diminishes the safe-haven appeal of the USD but also reflects a broader risk-on sentiment supporting the EUR/USD pair. The current trading at 1.1500 suggests a divergence from market consensus, which anticipates a stronger Euro over the coming quarters.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1700 for March 2026 (median across 12 firms), with UBS at the upper bound (1.2000) and Citi at the lower (1.1300). The current level shows that many firms maintain an optimistic outlook, indicating confidence in the Euro’s trajectory relative to the Dollar.
How firms align
Goldman Sachs and Deutsche Bank are notably bullish, each projecting 1.1800 for March 2026, which aligns with the current positive movement in EUR/USD. Meanwhile, if we look at BofA’s more cautious stance at 1.1700, it presents a contrasting viewpoint within our internal analysis. For further insight, see our coverage on BofA’s outlook at /research/eurusd-consensus-gap-may-2026.
What the data shows
Recent adjustments have seen ING revise their EUR forecast to 1.1900 for March 2026 and 1.2200 for December 2026, underscoring growing optimism among major players, as outlined in our report /research/eurusd-divergence-consensus-vs-spot-may-2026.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD currently trading at 1.1500, diverging from consensus.
- 02Reflected optimism amidst decreasing USD safe-haven demand.
- 03Key resistance level to watch: 1.1700 in line with consensus target.
Market implications
Investors should keep an eye on any developments regarding US-Iran relations, as additional de-escalations could further support Euro strengthening. Additionally, the consensus target of 1.1700 for March 2026 should serve as a pivotal level for traders looking to position in EUR/USD.
Risks to this view
A significant escalation in geopolitical tensions or a sudden shift in US economic policies could reverse the current bearish sentiment towards the Dollar. Such events may refocus attention on the USD’s safe-haven attributes, potentially leading to a retreat in the EUR/USD pair.
Sentiment by currency
USD-EUR+JPY~GBP~Composite USD score: -0.55
Sources & References
How we cover this story
Other coverage on this pair
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Euro: Risk-off pressure persists against US Dollar – Danske Bank
Risk-off environment continues to favor USD strength as safe-haven demand outweighs fundamentals, pressuring EUR/USD lower.
Bank desks on this topic
Dollar faces renewed strength if US-Iran talks fail, MUFG warns
MUFG analysts warn the dollar could strengthen further if US-Iran talks collapse, with energy-driven inflation risks potentially pushing Fed officials toward a more hawkish stance and lifting US yields. - The US dollar faces renewed upward pressure if Washington and Tehran fail t
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
EUR/USD was hit in March on expectations that the stagflationary shock from Iran would resonate more in Europe than the US. The inflationary effects have been plain for all to see, but this week's release of European PMIs warns that the stagnationary effect is just starting to la
Cross-firm research
EUR/USD Trades 3.16% Below Dec-26 Consensus as 18 Firms Hold 1.20 Median
With spot at 1.1621 and the 18-firm median Dec-26 target at 1.20, EUR/USD sits 3.16% below consensus—a gap that demands explanation.
EUR/USD Trades 3.2% Below Dec-26 Consensus as Targets Cluster Near 1.20
Spot at 1.1612 sits 3.2% below the 18-firm median Dec-26 target of 1.20, exposing a consensus that remains structurally bullish EUR despite the pair's failure to close the gap.
EUR/USD Trades 4% Below Dec-26 Consensus: What the Gap Reveals
EUR/USD spot at 1.1711 sits 4.01% below the eight-firm median Dec-26 target of 1.22, exposing a structural tension between macro conviction and current tape.