Euro: Limited downside, range defined against US Dollar – Scotiabank
Scotiabank suggests that the euro exhibits limited downside against the US dollar, with defined range behavior likely to persist in the near term. Currently positioned at 1.1446, the euro has an upward target consensus, indicating traders are weighing an appreciation against potential headwinds. This analysis is particularly relevant given the ongoing macroeconomic factors influencing both currencies, especially ahead of key ECB interest rate decisions.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across 8 firms), with UBS at the upper bound (1.2000) and Lloyds at the lower (1.1331). Scotiabank's outlook closely aligns with this range, suggesting that despite the current bearish sentiment, there remains room for upward movement. Firms like RBC and Morgan Stanley also support this perspective with their respective targets of 1.1600 and 1.2000 for March 2026.
How firms align
RBC projects a more bullish stance at 1.1600 for March 2026, reflecting confidence in the euro's resilience, while firms like UOB maintain a target of 1.1536, indicating a moderate view. On the downside, Stanchart offers a more cautious target of 1.1400, which contrasts with the collective optimism reflected by other firms. For additional insights, see our internal analyses in /research/eurusd-ecb-rate-path-2026-08-30.
What the data shows
Recent forecast revisions indicate a slight upward trend, with several firms adjusting their EUR targets upwards amid positive sentiment. For instance, Morgan Stanley recently revised its March 2026 target to 1.2000, reinforcing the bullish outlook as captured by our consensus research in /research/eurusd-ecb-rate-path-2026-08-27.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Current EUR/USD spot at 1.1446 shows limited downside per Scotiabank's analysis.
- 02Bulls see potential for euro appreciation, targeting 1.1700 and above.
- 03Key ECB decisions ahead could challenge or support this outlook.
- 04Upward revisions from firms signal confidence in euro strength.
Market implications
Next, traders should monitor movements around the 1.1500 level as the euro seems poised for volatility. Additionally, key ECB announcements scheduled for the coming weeks could shift sentiment and provide clearer direction toward achieving our consensus target of 1.1700.
Risks to this view
Any unexpected shifts in ECB policy, particularly dovish stances that could reinforce USD strength, may jeopardize the bullish euro outlook. A break below 1.1400 might trigger increased bearish positioning among traders.
Sentiment by currency
USD~EUR~JPY~GBP~Composite USD score: +0.00
Firms mentioned
Sources & References
How we cover this story
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