EUR/USD Weekly Forecast: ECB to hike as Trump pushes for lower US rates
The upcoming ECB rate hike is set against a backdrop of President Trump's push for lower US rates, which is influencing perceptions related to the EUR/USD pair. With the euro currently at 1.1446, the market anticipates a divergence in monetary policy that may favor the euro. It is crucial to watch how these elements interplay, as they could drive the euro higher against the dollar if the ECB is perceived as more hawkish compared to the Fed's stance.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1700 (median across firms), showcasing a narrow range from 1.1200 to 1.2000. The most bullish forecast comes from Morgan Stanley at 1.2000 for March 2026, while Rabobank offers a more conservative view at 1.1400.
How firms align
Morgan Stanley's bullish stance at 1.2000 for March 2026 reinforces the argument for a stronger euro as the ECB prepares to hike interest rates. Similarly, RBC holds at 1.1600 for March, in line with the anticipated bullish trajectory mentioned in the headline. For more detailed insights, see our reports on /research/eurusd-ecb-rate-path-2026-09-02.
What the data shows
Recent revisions highlight a general sentiment of rising EUR expectations, with Credit Agricole revising their March target to 1.1584. Meanwhile, UBS maintains a high target at 1.2000, indicating a strong belief in the euro's strengthening outlook. See our research on /research/ecb-decision-preview-2026-09-10 for additional context.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD spot at 1.1446 showing potential for upward movement if ECB hikes rates.
- 02Monitor ECB decisions closely, particularly related to interest rates.
- 03Risk of USD weakness if Trump continues to advocate for lower rates.
- 04Market sentiment indicates upward pressure on euro with targets around 1.1700-1.2000.
Market implications
Traders should watch the ECB meeting on September 10 as a critical event. A hawkish surprise could challenge the current 1.1700 consensus target. Additionally, the interplay between US policy and ECB's direction could lead to increased volatility in the EUR/USD pair.
Risks to this view
A major catalyst that could reverse the current outlook would be unexpected dovish rhetoric from the ECB or a shift in market sentiment regarding Fed rate cuts, which would favor the dollar over the euro.
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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