Euro nudges up above 1.1640 amid broad-based US Dollar weakness
The Euro has subtly climbed above the 1.1640 mark, primarily benefiting from a broader weakening of the US Dollar. This development underscores the ongoing market sentiment that favors Euro strength, especially as traders digest the implications of potential shifts in monetary policy. With the European Central Bank's decision on the horizon, the market is keenly aware of how interest rate trajectories could influence Euro valuations vis-à-vis the Dollar.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1700 for March 2026, reflecting a median across several firms, with RBC and Morgan Stanley both envisioning levels at 1.2000. On the lower side, Standard Chartered and Lloyds foresee targets at 1.1400 and 1.1331 respectively, indicating a brisk divergence in outlook across the market.
How firms align
Morgan Stanley appears the most bullish regarding the Euro, forecasting a March 2026 target of 1.2000. Conversely, Standard Chartered takes a more cautious stance at 1.1400. This spectrum of views illustrates contrasting market expectations, with Morgan Stanley aligning with the current Euro momentum and Standard Chartered reflecting a bearish sentiment. For further insights, refer to `/research/eurusd-ecb-rate-path-2026-09-08` for analysis on the current consensus dynamics.
What the data shows
Recent forecast adjustments reveal a shift towards optimism, with Mizuho raising their March target to 1.1800 and UBS maintaining high projections at 1.2000. This momentum aligns with our previous reports that indicated a steady push towards the consensus target of 1.1700 noted in `/research/eurusd-ecb-rate-path`.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Euro rises above 1.1640, driven by USD weakness.
- 02Watch the ECB's guidance as it may further influence EUR movements.
- 03Consensus target for March 2026 is 1.1700, reflecting market optimism.
- 04Divergence in firm forecasts highlights mixed sentiment.
Market implications
Going forward, traders should keep an eye on key support levels around 1.1600, which may act as a psychological barrier. Upcoming ECB meetings could provide catalysts for further Euro movements, especially with the consensus target resting at 1.1700.
Risks to this view
A stronger-than-expected US economic data release could challenge the current bullish sentiment and lead to a reversal in Euro strength. Additionally, any shifts in ECB policy that signal a more dovish outlook could undermine the Euro's current momentum.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.45
Sources & References
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