Euro extends losing streak against US Dollar, Fed-ECB policy eyed
The Euro continues to struggle against the US Dollar, marking its fifth consecutive day of declines as market apprehension towards the French bond market resurfaces. As the EUR/USD price approaches 1.1140, traders are closely monitoring how this might influence the ECB's policy outlook. Given these pressures, the recent performance of EUR suggests an increasing divergence in monetary policy trajectories between the Fed and ECB, further complicating the currency's near-term outlook.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.150 (median across firms), with Commerzbank at the upper bound (1.2200) and Investec at the lower (1.1455). The headline sentiment underscores a bearish outlook for the Euro, which aligns with some of our forecasters' stances but notably diverges from others.
How firms align
RBC (1.1700), BNP Paribas (1.1600), and Nomura (1.1700) share a more optimistic view on the Euro in contrast to the bearish sentiment reflected in the recent price action. This indicates a split amongst firms, with some seeing recovery potential despite the current stresses highlighted in /research/eurusd-ecb-rate-path.
What the data shows
Recent revisions from firms like MUFG (Mar26 at 1.1800) and UBS (Mar26 at 1.2000) demonstrate a confidence variance that may be influenced by upcoming announcements. Additionally, our recent report /research/eurusd-ecb-rate-path-2026-10-26 supports the notion that market positioning remains uncertain ahead of the ECB's upcoming decisions.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD trades near 1.1140, extending losses into a fifth day.
- 02Traders should watch ECB rhetoric closely, particularly around bond market stability.
- 03Upcoming interest rate decisions by the Fed and ECB will be pivotal at these levels.
Market implications
Observers should keep an eye on the 1.1100 level for EUR/USD, as a breach could lead to further downside. Upcoming data releases and the ECB's policy stance on October 29 may provide additional direction for currency movements. Our consensus target of 1.150 could be at risk if the ECB adopts a more dovish tone.
Risks to this view
A significant rebound in the Euro could occur if the French bond market stabilizes or if the ECB hints at a more aggressive tightening stance than currently anticipated. Any abrupt shift in market sentiment regarding Eurozone fiscal health would serve as a catalyst for a rapid adjustment in EUR/USD positioning.
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: Downside risks persist near key support against US Dollar - ING
EUR/USD downside risks near support suggest USD strength narrative intact; French political uncertainty weighing on euro valuations.
EUR/USD in the red: Fed rate, IPO and geopolitics support the Dollar
Fed policy decision this week could extend USD strength; four-day EUR/USD downtrend suggests momentum favoring dollar on rate differential expectations.
Euro: Downside bias toward supports against US Dollar – UOB
EUR/USD breakdown below recent range to 1.1172 signals short-term momentum shift; watch 1.1150 as next technical support.