EUR/USD Price Forecast: Doubling US bond-buying plan opens way for 1.1800
The recent announcement from the US to double its bond-buying plan signals prolonged monetary easing, a dynamic that is poised to bolster the USD while placing downward pressure on the EUR. As a result, projections for EUR/USD are now converging toward the 1.1800 mark, reflecting a market increasingly anticipating a supportive stance from the Federal Reserve. This development aligns with broader bearish sentiment for the Euro, fostering a consensus shift among analysts.
Where it sits in our coverage
Our consensus EUR/USD target currently rests at 1.1600 for December 2026, with forecasts ranging from a bullish 1.2000 by Standard Chartered to a more conservative 1.1100 by Danske Bank. This spectrum reflects differing opinions on the Euro's trajectory amid evolving US bond market conditions, suggesting a potential divergence in views among key players.
How firms align
Aligned with the headline's bearish outlook for the Euro, firms such as Deutsche Bank and MUFG project a EUR/USD target of 1.1800 for March 2026. Conversely, firms like Lloyds set a more cautious estimate of 1.1331 over the same timeframe, indicating a notable spread in sentiment within the market. This divergence showcases the broader uncertainty over the Euro's near-term strength in light of US monetary policy shifts.
What the data shows
Recent forecast revisions highlight a shift towards a lower outlook for the Euro, with Deutsche Bank revising down to 1.1800 and Mizuho adjusting to 1.1800—all reflecting the evolving market sentiment. Our latest insights from /research/eurusd-ecb-rate-path-2026-08-20 reveal that the recent consensus has been more aligned towards a bearish outlook as the market reacts to the Fed's expanding bond purchases.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01US bond-buying expansion increases pressure on EUR/USD toward 1.1800.
- 02Market sentiment shifts towards a bearish Euro outlook as Fed signals continued accommodation.
- 03Monitor upcoming economic data releases for impacts on Fed policy and Euro positioning.
Market implications
Traders should watch for EUR/USD movements near the 1.1800 level, which may serve as a critical support point. Key upcoming economic releases and Fed communications will also play a decisive role in shaping market perceptions. Our consensus of 1.1600 for December 2026 suggests a cautious approach in positioning ahead of potential volatility.
Risks to this view
A reversal in this outlook could stem from unexpected shifts in Fed policy or stronger-than-anticipated Eurozone economic data. If, for instance, inflation figures or employment numbers from the EU exceed forecasts, it could prompt a reevaluation of EUR strength, potentially invalidating the current bearish sentiment.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
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