EUR/USD: Inflation-driven stabilisation hopes – ING
Recent commentary by ING posits an optimistic outlook for EUR/USD, driven by expectations of stabilization in Eurozone inflation. This sentiment aligns with a broader recovery narrative for the euro, especially if the European Central Bank (ECB) adopts a more prolonged restrictive policy stance than currently anticipated. The market now scrutinizes potential divergences in monetary policy between the ECB and the Federal Reserve as a pivotal driver for exchange rate movements.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1700 (median across numerous firms), with Morgan Stanley at the high end of the forecast range at 1.2300 for June 2026, while Danske Bank projects a low of 1.1100 for December 2026. ING's perspective resonates with the upper range of targets from firms like RBC and Nomura, who also express bullish sentiments toward the euro as inflation stabilizes.
How firms align
Firms such as RBC and Nomura align with the bullish view espoused by ING, with RBC targeting 1.1700 for March 2026 and Nomura projecting a similar outcome. Conversely, BofA's expectations diverge significantly, presenting a more cautious stance with a Dec26 target at 1.1200, suggesting a possible overvaluation of the euro in the current environment.
What the data shows
Recent forecast revisions indicate a trend towards more bullish positions for the euro, with BofA adjusting their target to 1.1700 for March 2026. Insights from our internal reports—specifically /research/eurusd-ecb-rate-path-2026-09-27— underscore the consensus around a tightening ECB policy being supportive for EUR/USD growth.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD targets are adjusting upward, with a consensus target of 1.1700.
- 02Monitor ECB policy signals as they could shift the euro's trajectory.
- 03Watch for a divergence in central bank policies that may catalyze moves toward 1.18.
- 04BofA's lower target indicates market skepticism about the euro's recovery potential.
Market implications
Looking ahead, traders should keep an eye on the 1.1700 level as a critical benchmark for EUR/USD. Additionally, upcoming ECB meetings could further clarify the central bank's policy direction, affecting euro positioning. Our structured outlook will refine as new data comes in.
Risks to this view
A reversal in this bullish sentiment for EUR/USD could occur if inflation data surprises to the downside, prompting speculation of a more dovish ECB. Furthermore, any unexpected shift in Federal Reserve policy could overshadow the euro's strength.
Sentiment by currency
USD~EUR+JPY~GBP~Composite USD score: -0.35
Sources & References
How we cover this story
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