Euro eases from three-month high as US Dollar stabilises, Jobless Claims beat expectations
The euro nudged lower from a three-month peak as the US dollar steadied following a better-than-expected jobless claims print, which underscored the resilience of the US labor market. For the desk, the pullback is a tactical breather rather than a trend reversal—the EUR's structural bid remains underpinned by a hawkish ECB repricing, while USD sentiment is fragile ahead of the next data tests. The claims beat gives the dollar a temporary floor, but it doesn't alter the market's growing conviction that the Fed's easing cycle will outpace the ECB's, keeping EUR/USD supported on dips.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across 12 firms) for Mar26, with the range spanning 1.1331 (Lloyds, most bearish) to 1.2000 (Morgan Stanley, UBS, StanChart, RBC, Nomura – upper bound). The headline's 'euro eases from three-month high' aligns with the upper third of our dispersion—firms like Morgan Stanley and UBS have aggressive 1.20 targets, while the consensus itself is 2.2% above spot at 1.1446, implying a modest upward bias despite today's dip.
How firms align
Firms with Mar26 targets at or above 1.18—Morgan Stanley (1.20), UBS (1.20), StanChart (1.20), RBC (1.20), Nomura (1.20), MUFG (1.18), Danske (1.1866)—see the euro's strength as intact, viewing the pullback as a buying opportunity. Conversely, Lloyds (1.1331) and HSBC (1.1700) are more cautious, with Lloyds the lone bearish outlier below 1.14, suggesting near-term downside risk if USD stabilisation persists. Our internal /reports/lloyds page flags a dovish ECB bias, while /reports/morganstanley sees upside on Fed easing.
What the data shows
Recent revisions support the constructive medium-term view: UOB and Deutsche Bank updated their Dec26 targets higher in mid-August, with 's Mar26 at 1.18 and 's Dec26 climbing to 1.25 earlier in the month. Our published research, /research/eurusd-ecb-rate-path-2026-08-20, noted spot at 1.1677 vs a median, and the gap has now widened to ~2.6 cents, with the median Mar26 at —suggesting the market's drift is toward the consensus rather than away from it.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD eased from 1.15 area to 1.1446 after US jobless claims beat; spot still above our Mar26 median of 1.17.
- 02US labor data resilience gives USD a near-term floor, but the Fed-ECB policy divergence narrative remains EUR-positive.
- 03Watch 1.1400 (Lloyds' Mar26 target) as key support; a break below could signal a deeper correction.
- 04Consensus dispersion is wide (1.1331–1.20), with banks split between aggressive upside and cautious near-term.
Market implications
Next focus shifts to US PCE data (due Aug 28) and any Fed-speak around Jackson Hole. A hot PCE print could trigger a retest of 1.1400, aligning with Lloyds' target; a miss would likely push EUR back toward 1.1500 and the 50-day MA. Our consensus Mar26 target of 1.1700 implies a ~2.2% upside from spot, and we'd expect that level to come into play if the dollar's stabilisation proves short-lived.
Risks to this view
The view would be invalidated if US data surprises consistently to the upside (e.g., NFP on Sep 4), forcing the Fed to push back on rate cuts and lifting USD across the board. Additionally, a hawkish surprise from the ECB at its September meeting (e.g., signalling a pause) could disappoint EUR bulls, sending spot toward the 1.13 handle, below Lloyds' 1.1331 target.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
Euro: Bullish trend eyes upper 1.17s against US Dollar – Scotiabank
EUR/USD bullish momentum targeting 1.17 level signals weakening USD technicals and potential break above near-term resistance.
Euro: Benefits from US Dollar weakness – DBS
USD weakness thesis supports EUR upside; monitor for tactical pullbacks near 1.0850 resistance before fresh positioning.
1.1700: Euro hits three-month highs as US Bond buyback plan crushes the US Dollar
US bond buyback announcement signals fiscal concerns and potential USD supply pressure; EUR/USD break above 1.17 tests key technical resistance.