Euro: Risk-off pressure persists against US Dollar – Danske Bank
The Euro is under persistent risk-off pressure amid increasing safe-haven demand for the US Dollar, as highlighted by Danske Bank. This trend reflects broader market sentiments that favor the USD over the Euro, primarily driven by geopolitical uncertainties and economic data releases that tilt investors towards more secure assets. The current spot is at 1.1500, significantly below many forecasts, indicating a potential divergence from prevailing expectations.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.1700 (median across 19 firms), with UBS at the upper bound (1.2000) and Citi at the lower (1.1300). Danske Bank's bearish outlook aligns with this sentiment, reflecting current market dynamics.
How firms align
JPMorgan, Goldman, and MUFG have projected targets ranging from 1.1800 to 1.2000 for March 2026, indicating a more optimistic view compared to market sentiments, while BofA and Citi remain more conservative. The divergence suggests varying interpretations of the Eurozone's economic resilience against US economic strength, as reflected in our analysis.
What the data shows
Recent forecast revisions indicate a more bullish stance from ING, which raised its March 2026 target to 1.1900 and December 2026 to 1.2200, indicating a potential shift in expectations. For further insights, see our research on the EUR/USD divergence, particularly /research/eurusd-divergence-consensus-vs-spot-may-2026.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Strong USD demand persists as market sentiment shifts toward safe havens.
- 02Given the current level of 1.1500, traders should monitor for potential resistance or support levels.
- 03Geopolitical events could accelerate volatility in EUR/USD, especially against a backdrop of US data.
- 04Targets indicate diverging strategies among firms—could signal broader market hesitance.
Market implications
Investors should watch for significant economic data releases from the US and Eurozone, particularly around the next ECB meeting, which may impact the EUR/USD dynamics. With our consensus target at 1.1700, the ability to maintain levels above 1.1500 will be crucial.
Risks to this view
A reversal in this bearish view could be catalyzed by unexpected positive economic data from the Eurozone or deterioration in US economic indicators. Additionally, shifts in central bank policies or geopolitical resolutions would necessitate a reassessment of positions.
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: Mild downside bias within range against US Dollar – UOB
EUR/USD positioned for mild downside within established range; suggests near-term consolidation with USD resilience at current levels.
Euro slumps below 1.1600 against US Dollar amid fears of US-Iran war resumption
Geopolitical escalation in Middle East typically triggers safe-haven demand for USD and JPY, supporting dollar strength and pressure on risk-sensitive assets like EUR.
Euro: Limited downside against US Dollar with ECB hike message – MUFG
ECB's continued hike messaging supports EUR/USD floor around current levels; limited downside signals reduced momentum for USD longs.
Euro: Gains capped against US Dollar by Fed story – ING
Fed rate expectations remain supportive of USD strength, structurally limiting EUR/USD upside despite recent euro resilience.
Bank desks on this topic
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
https://think.ing.com/articles/fx-daily-iran-fall-out-coming-home-to-roost-in-eur-usd/
FX Daily: Iran fall-out coming home to roost in EUR/USD
EUR/USD was hit in March on expectations that the stagflationary shock from Iran would resonate more in Europe than the US. The inflationary effects have been plain for all to see, but this week's release of European PMIs warns that the stagnationary effect is just starting to la
Morgan Stanley: How Much Will FX Hedging Flows Boost EUR/USD? - eFXdata
Morgan Stanley: How Much Will FX Hedging Flows Boost EUR/USD? eFXdata
Cross-firm research
EUR/USD Trades 3.16% Below Dec-26 Consensus as 18 Firms Hold 1.20 Median
With spot at 1.1621 and the 18-firm median Dec-26 target at 1.20, EUR/USD sits 3.16% below consensus—a gap that demands explanation.
EUR/USD Trades 3.2% Below Dec-26 Consensus as Targets Cluster Near 1.20
Spot at 1.1612 sits 3.2% below the 18-firm median Dec-26 target of 1.20, exposing a consensus that remains structurally bullish EUR despite the pair's failure to close the gap.
EUR/USD Trades 4% Below Dec-26 Consensus: What the Gap Reveals
EUR/USD spot at 1.1711 sits 4.01% below the eight-firm median Dec-26 target of 1.22, exposing a structural tension between macro conviction and current tape.