Euro: Bullish tone persists against US Dollar despite French risks - Scotiabank
The bullish sentiment around the euro persists against the US dollar, despite potential political disruptions stemming from France. Scotiabank highlights that the market has largely positioned itself to account for these risks, indicating an ongoing interest in euro appreciation. As the euro trades at approximately 1.1253, it suggests that traders are looking for either stability or a resolution of French political uncertainty in the near term, fueling optimistic forecasts.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across firms), with Rabobank and Nomura placing their targets at the upper bound of 1.1866 and 1.1800, respectively. The more cautious firms like TMGM and Investec, however, predict significantly lower levels around 1.1447 to 1.1455, reflecting a notable spread in expectations across the board.
How firms align
Aligned with Scotiabank’s bullish view, Citibank anticipates a target of 1.1866 for March 2026, indicating strong confidence in the euro’s strength. On the contrary, TMGM’s target of 1.1447 for the same period suggests a more moderated outlook that diverges from the prevailing bullish sentiment. This division can be tracked in our internal reports like /research/eurusd-ecb-rate-path-2026-10-17.
What the data shows
Recent revisions have seen firms like SocGen and BofA adjusting their targets upwards, now both sitting at 1.1700, which aligns with the overall consensus. Furthermore, we noted a gap between the current spot and consensus in our findings from /research/eurusd-ecb-rate-path-2026-10-18, reinforcing the potential for upside in EUR/USD positioning.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD shows potential for gains, currently at 1.1253, with targets averaging around 1.1700.
- 02Positioning indicates traders expect French risks to be manageable in the near term.
- 03Be alert for political developments in France as they could shift sentiment swiftly.
- 04Market consensus leans bullish, but caution persists due to inherent risks.
Market implications
Watch for levels around 1.1447 as a support following the bullish tone. Economic data releases from the Eurozone could further influence market sentiment towards the consensus target of 1.1700. The upcoming ECB meeting is also pivotal.
Risks to this view
A significant deterioration in France's political situation would likely reverse euro strength, especially if it causes a ripple effect through market confidence. Additionally, any unexpected hawkish moves from the Fed could also shift the narrative.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.55
Firms mentioned
Sources & References
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