Euro advances as US Dollar weakens amid cooling Inflation
The Euro continues its upward trajectory against the US Dollar as fresh data highlighting a slowdown in US inflation weakens the latter's appeal. The cooling inflation landscape has diminished expectations for the Federal Reserve's rate hikes, thereby creating additional downward pressure on the USD. As a result, the EUR/USD pair has been buoyed, with the recent spot price reaching 1.1419. This shift is significant as it may prompt a reevaluation of long-term Euro forecasts in the context of a potentially decelerating US monetary policy.
Where it sits in our coverage
Our consensus EUR/USD target now stands at 1.1700 for March 2026, with the range stretching from 1.1200 to 1.2000 across various firms. Goldman places its target at the higher end (1.1800) while TMGM is more conservative at 1.1447, reflecting a diverse outlook in the market.
How firms align
Goldman and Deutschebank are positioned bullishly with targets of 1.1800 and 1.1800, respectively, which align closely with the bullish sentiment indicated by today's headline. In contrast, TMGM and UOB remain cautious with lower targets, suggesting a varied confidence in Euro strength versus the dollar. Refer to our reports for further analysis on these stances.
What the data shows
Recent forecast revisions have nudged several firms upwards, with Deutsche Bank adjusting its March target to 1.1800, indicating a shift towards a more optimistic outlook. For additional insights into forecast adjustments, see our related research papers like /research/eurusd-ecb-rate-path-2026-08-12.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD rises to 1.1419 as US inflation cools, supporting Euro strength.
- 02Look for upward momentum towards 1.1700 amid Fed rate uncertainties.
- 03Cautious positioning from firms like TMGM (1.1447) suggests risk exists.
- 04Major catalyst includes upcoming US inflation reports impacting Fed views.
Market implications
Traders should closely watch the 1.1700 level as potential resistance. Additionally, the upcoming US inflation report on the economic calendar could serve as a key driver for further USD movements. Our consensus target provides a focal point for evaluating potential upside in the Euro.
Risks to this view
A surprising uptick in US inflation could reset expectations for Federal Reserve rate hikes, possibly reversing current USD weakness. Additionally, geopolitical tensions or unexpected fiscal policy changes could undermine the Euro's newfound strength.
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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