Euro extends downfall against US Dollar amid firm Fed hike bets
The Euro's ongoing decline against the US Dollar continues to be driven by robust expectations surrounding Federal Reserve interest rate hikes. As we approach the next Fed meeting, market participants are increasingly pricing in tightening measures, which bolster the Dollar's appeal. This sentiment aligns closely with recent revisions from many banks indicating weaker prospects for the Euro, signaling that the downward pressure may persist in the near term. The EUR/USD now trades around 1.1500, well below consensus forecasts.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1700 (median across 11 firms), with UBS at the upper end of the range (1.2000) and Citi at the lower end (1.1300). The sentiment expressed in [fxstreet.com's article](#) reinforces a generally bearish outlook for the Euro, suggesting participants should closely monitor Fed communications.
How firms align
Firms like Barclays and HSBC are more aligned with the bearish sentiment highlighted, posting targets of 1.1700 for March 2026. Conversely, UBS holds a bullish stance, projecting the Euro to be stronger at 1.2000 for the same timeframe. For detailed analyses, see our internal reports on Barclays and HSBC.
What the data shows
Recent forecast adjustments reflect heightened skepticism around the Euro, particularly highlighted by Deutsche Bank's revision to 1.1800 for March 2026. Insights from our research, including /research/eurusd-ecb-rate-path, emphasize a potential divergence from consensus expectations as central bank policies evolve.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD trades at 1.1500, reflecting pressure from solid Fed rate hike expectations.
- 02Market sentiment increasingly favors the USD as traders prepare for tighter monetary policy.
- 03Watch for Fed communications that could signal changes in interest rate trajectories.
- 04Expectations for the Euro continue to be revised lower among leading institutions.
Market implications
Next, traders should watch the 1.1400 level, as breaking below could accelerate selling pressure on the Euro. The upcoming Fed meeting on March 20 will be pivotal for reassessing market expectations against our consensus target of 1.1700.
Risks to this view
A shift in Fed policy, signaling a pause in rate hikes or more dovish guidance, could invalidates this bearish outlook for the Euro. Such developments would likely boost Euro demand and lead to a reversal towards stronger targets.
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: Stabilising above 1.1300 against US Dollar with risk driver – ING
Euro: Downtrend stretched near 1.1325 against US Dollar – UOB
EUR/USD downtrend extension suggests oversold conditions near 1.1325; watch for mean reversion or fresh bearish catalyst to determine next directional move.
EUR/USD Price Forecast: Rebounds above 1.1350, but outlook stays bearish below key resistance
EUR/USD bounce to 1.1350 lacks conviction; structural bearish bias persists until sustained break above key technical resistance.
Euro: Bearish bias with scope toward 1.12 against US Dollar – Scotiabank
Scotiabank's 1.12 EUR/USD target implies ~2% downside from current levels, signaling institutional conviction on euro weakness relative to dollar strength.
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