Euro: Benefits from US Dollar weakness – DBS
The Euro is gaining traction amidst a weakening US Dollar, as highlighted by DBS. This dynamic reflects persistent market sentiment favoring the Euro, potentially driven by renewed optimism around the ECB's monetary policy and broader economic stability in the Eurozone. As the current spot rate hovers around 1.1446, the focus will be on whether this Dollar weakness can be sustained and what it means for future Euro strength.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1677 (median across 30 firms), with projections ranging from a low of 1.1100 to a high of 1.2600. The current spot rate suggests some divergence as markets await further clarifications on monetary policies from both the ECB and the Fed.
How firms align
Looking at the projections, firms like RBC (1.1600 for Mar26) and UBS (1.2000 for Mar26) align closely with the bullish sentiment regarding the Euro's prospects, strengthening the view presented by DBS. However, conservative targets from Lloyds at 1.1331 for Mar26 illustrate a more cautious stance.
What the data shows
Recent revisions include Deutsche Bank’s upward adjustments for March and December 2026 targets to 1.1800 and 1.1620, respectively. Insights from our recent reports underscore that while the Euro is benefiting, market volatility and central bank actions will continue to play a pivotal role during this phase.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Euro strength is tied to US Dollar weakness — current spot at 1.1446.
- 02Traders should monitor ECB policy shifts amid rising Euro sentiment.
- 03Potential resistance level lies at 1.1700 as per consensus target.
- 04Market reactions to upcoming data releases may further illuminate trends.
Market implications
Investors should watch for key economic data releases next week, particularly any indicators from the US, as they could influence Euro performance. Given our consensus target of 1.1677, a break above this level could signal further Euro gains.
Risks to this view
A reversal of Euro strength could occur if US economic indicators outperform expectations, prompting a firmer Fed stance. Additionally, any shift in ECB rhetoric could undermine current Euro bullish sentiment.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.55
Sources & References
How we cover this story
Other coverage on this pair
Euro: Bullish trend eyes upper 1.17s against US Dollar – Scotiabank
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