Euro: Lending slowdown threatens key support against US Dollar - ING
EUR/USD is currently navigating its year-to-date lows at 1.1253, under pressure from robust Dollar performance and high energy costs. ING's analysis underscores that tighter lending conditions within the Eurozone could weigh heavily on the common currency, especially amidst uncertainties surrounding the fiscal strategies of the French government. As we approach the release of the 3Q26 GDP data, it's critical to monitor how these elements might shift sentiment in the currency market.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1500 (median across 13 firms), with CIBC's bullish outlook at 1.2200 marking the upper bound and Wells Fargo's more cautious target of 1.1200 at the lower end. ING aligns closely with this median, setting a target of 1.1700 for March 26, 2026, indicating a belief in a potential recovery in the Euro.
How firms align
Specific firms like Nordea and Rabobank hold similar views to the headline, predicting a March target of 1.1884 and 1.1759, respectively, signaling optimism for the Euro's recovery against the Dollar. In contrast, Investec's more bearish stance with a target of 1.1455 implies skepticism regarding the Euro's short-term resilience.
What the data shows
Recent forecast revisions indicate a mixed sentiment, with SocGen and BofA adjusting their March target to 1.1700 and 1.1700, respectively, while Mizuho remains more subdued at 1.1300. For more context, see our insights in /research/eurusd-ecb-rate-path-2026-10-25.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD languishes at 1.1253, pressured by Dollar strength and energy prices.
- 02Watch lending conditions closely—they could dictate Eurozone economic outlook.
- 03An important catalyst for direction will be the upcoming 3Q26 GDP data release.
- 04A recovery to our consensus of 1.1500 requires a shift in market sentiment.
Market implications
Traders should keep an eye on the 1.1200 level as a psychological support point for EUR/USD. The upcoming ECB rate decision on October 29 may provide crucial insights into future Euro strength, aligning with our consensus forecast of 1.1500 for the medium term.
Risks to this view
Any significant deterioration in Eurozone economic data, particularly around lending conditions or GDP releases, could invalidate the current bullish perspective. A surprise shift towards more aggressive fiscal measures in France could also contribute to downward pressure on the Euro.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
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