Euro: ECB expectations support EUR against US Dollar – Scotiabank
The euro remains supported against the US dollar as ECB expectations bolster its outlook, according to Scotiabank. With the euro currently trading around 1.1446, market sentiment appears to be leaning towards a more optimistic view based on projections of ECB rate hikes. This support follows revisions from various banks, indicating a bullish consensus that positions the euro ahead of upcoming economic indicators and central bank decisions.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across firms), while the range spans from a low of 1.1200 to a high of 1.2000 for the Mar26 horizon. This indicates a relatively positive sentiment in the market, with firms like RBC and Morgan Stanley providing more bullish targets at 1.1600 and 1.2000, respectively.
How firms align
Scotiabank's positive outlook aligns with targets from notable firms such as RBC, whose March target is 1.1600, and Morgan Stanley, forecasting 1.2000 for the same period. Conversely, firms like Danske Bank hold a slightly more reserved view, with a March target of 1.1866. For further details, see our internal reports on these firms.
What the data shows
Recent forecast revisions indicate an upward adjustment from firms like UBS, now targeting 1.2000 for March 2026, suggesting that the street is rallying towards a more aggressive euro outlook. Check our related insights: /research/eurusd-ecb-rate-path-2026-09-08 and /research/eurusd-ecb-rate-path-2026-09-10 for a deeper dive into ECB expectations.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD currently trading at 1.1446 with upside potential towards 1.1700.
- 02Trader sentiment leaning bullish based on ECB's anticipated rate trajectory.
- 03Monitor upcoming economic indicators and ECB meetings as catalysts for movement.
Market implications
With the consensus target at 1.1700, traders should keep a close eye on ECB policy signals in the coming days, particularly the rate decision on September 10. A sustained close above 1.1450 could solidify the bullish sentiment around the euro.
Risks to this view
A reversal in this bullish view could occur if incoming economic data disappoints or if the ECB signals a more cautious approach to rate hikes. Specifically, a dovish tone from the ECB could challenge the euro's current support levels.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.35
Firms mentioned
Sources & References
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