Euro edges higher against US Dollar after soft US PPI data
The euro has gained traction against the US dollar, buoyed by weaker-than-expected US PPI data, which has softened the greenback's appeal. This move reflects broader market expectations of moderating inflation, leading to potential shifts in Fed policy that could favor the eurozone's economic stability. Given the current spot at 1.1419, this uptick suggests a recalibration of investor sentiment following recent economic indicators, highlighting the ongoing divergence in monetary policy outlooks between the ECB and Fed.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1700 (median across 12 firms), with Goldman at the higher end (1.1800) and MUFG at the lower (1.1800). This positioning aligns closely with the current market sentiment, emphasizing a potential upward trajectory for the euro against the dollar following the recent US data release.
How firms align
Specific firms such as Goldman and Morgan Stanley project appreciations for the euro, with March 2026 targets of 1.1800 and 1.2000 respectively. This contrasts with BofA, which maintains a more conservative outlook at 1.1700 for the same timeframe, indicating varying degrees of confidence in euro strength as reported in our insights (/research/eurusd-ecb-rate-path-2026-08-13).
What the data shows
Recent revisions from Deutsche Bank and ING reflect optimism, raising their March 2026 targets to 1.1800, which supports a continued upward adjustment in expectations for the EUR/USD pair. As noted in our recent research, the divergence in forecasts suggests potential volatility ahead as market participants adjust to incoming economic data.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD targets trending higher; consensus at 1.1700 reflects bullish sentiment.
- 02Soft PPI data signals potential shifts in Fed policy, favoring EUR strength.
- 03Watch for breaks above 1.1450 to maintain upward trajectory.
Market implications
Going forward, traders should monitor the 1.1450 level for any breakouts, which could indicate further euro strength. The upcoming ECB meeting is also a key event to watch as it may impact future policy guidance and market positioning in regard to the euro.
Risks to this view
Should US inflation data rebound unexpectedly, or if the Fed signals a more hawkish stance than anticipated, this could quickly reverse the euro's recent gains, pushing the pair back toward the lower end of our consensus range.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.35
Sources & References
How we cover this story
Other coverage on this pair
Euro: Choppy range trading outlook against US Dollar – Rabobank
Euro: Range tests with upside bias against US Dollar – ING
ING sees EUR/USD testing range highs with upside bias, suggesting near-term support for euro strength against dollar.
Euro: Range phase after failed upside break against US Dollar – UOB
EUR/USD rejection at resistance suggests sellers controlled upper bound; range-bound outlook implies limited directional conviction until next breakout catalyst.