Euro: Upside bias against US Dollar as ECB repriced – Scotiabank
The euro currently shows a bullish sentiment against the US dollar, supported by the European Central Bank's recent adjustment in its monetary policy outlook. Scotiabank's analysis emphasizes the positive reassessment of the euro's value, suggesting that ongoing USD weakness, primarily due to compressing rate differentials, will likely pave the way for further EUR/USD recovery. This backdrop is critical now as the market begins to factor in the implications of shifting ECB directions amid a stagnating economic outlook for the US.
Where it sits in our coverage
Our consensus EUR/USD target stands at 1.1700 (median across 12 firms), with Commerzbank presenting the highest target at 1.2200 and Citi at the lowest, projecting 1.1300. Scotiabank's recent forecast aligns closely with our consensus, indicating a target of 1.1734 for March 2026, suggesting confidence in maintaining a bullish stance against the dollar.
How firms align
Several firms position themselves around the headline's assertive view on the euro. Both Goldman and Scotiabank project targets of 1.1800 and 1.1734 for March 2026, reflecting a strong EUR bias. In contrast, Citi holds a more bearish outlook with a target of 1.1300 for the same timeframe, diverging from the bullish consensus. [See our reports: /reports/scotiabank, /reports/goldman, /reports/citi].
What the data shows
Recent revisions by firms highlight an emerging consensus towards higher EUR/USD targets, particularly with Scotiabank and Goldman revising upwards. For further insights, refer to our research note on /research/eurusd-ecb-rate-path, emphasizing the potential divergence from present trading levels.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Near-term upside for EUR/USD expected, with current levels at 1.1434.
- 02Monitor ECB signals — should reinforce the bullish outlook.
- 03Watch for USD weakness to persist with rate differentials tightening.
- 04Scotiabank's target points to 1.1734 by March 2026.
Market implications
Market participants should watch for critical levels around 1.1500 as a potential breakout point. Upcoming ECB decisions and communications will be pivotal. Our consensus target of 1.1700 remains a key benchmark going forward.
Risks to this view
A shift in the Federal Reserve's rate stance could invalidate the bullish view on the euro, particularly if signs emerge of a more aggressive tightening regime. Additionally, any substantial economic deterioration in the Eurozone could lead to a reevaluation of the current bullish sentiment.
Sentiment by currency
USD EUR+JPY~GBP~Composite USD score: -0.65
Firms mentioned
Sources & References
How we cover this story
Other coverage on this pair
Euro: Upside bias held above strong support against US Dollar – UOB
EUR/USD holding above key support level suggests technicians see limited near-term downside and may increase bids on dips toward 1.08–1.09 levels.