Euro: Set to outperform Pound, US Dollar and Yen - Nomura
Nomura's outlook on the euro highlights its expected outperformance against the pound, US dollar, and yen, a sentiment supported by a generally bullish market environment for the euro. With recent positioning pointing towards a greater divergence in monetary policies, particularly between the ECB and its peers, the market may need to adjust quickly should this trend reverse. This outperformance estimate comes amid broader sentiment shaping market trajectories, pushing traders to reassess their positions as they monitor economic signals.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1700 for March 2026, with a range extending from 1.1200 to 1.2000 across various firms. Notably, firms like Morgan Stanley and UBS project targets at the higher end of this spectrum, with both pegging March 2026 at 1.2000.
How firms align
In alignment with Nomura's bullish perspective on the euro, Deutsche Bank's recent targets also suggest a positive outlook with their March 2026 target at 1.1800. Conversely, standard Chartered’s lower target for March at 1.1400 reflects a more cautious stance, revealing discrepancies in expected euro performance among firms.
What the data shows
Recent revisions show Deutsche Bank and UOB adjusting up, indicating a general consensus towards a strengthened euro against the US dollar going into next year, as reflected in our publication from August 21, 2026, detailing a spot rate of 1.1703 against our median target of 1.1634.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Nomura anticipates EUR to outperform GBP, USD, and JPY amid diverging rate paths.
- 02Traders should monitor ECB's stance on rates vs Fed, BoE, and BoJ.
- 03Positioning risk indicates potential volatility if divergence begins to narrow.
Market implications
Going forward, traders should keep an eye on the 1.1700 level for EUR/USD, as significant positioning around this consensus could highlight market sentiment shifts. Upcoming ECB meetings will also be critical in dictating the euro's trajectory against the dollar.
Risks to this view
Key risks to this outlook would include unexpected policy shifts from the ECB that align more closely with the Fed or BoE, potentially diminishing the euro's relative strength. Inflation surprises or political instability in the Eurozone could also disrupt the expected upward movement.
Sentiment by currency
USD EUR+JPY GBPComposite USD score: -0.65
Firms mentioned
Sources & References
How we cover this story
Other coverage on this pair
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