Euro: Weak US jobs lift EUR against US Dollar on Fed repricing – Danske Bank
The euro gained against the US dollar as weaker-than-expected US job figures prompted a reassessment of Federal Reserve rate hike expectations. Danske Bank notes this shift in sentiment, as traders recalibrate for potential dovish signals from the Fed. This market reaction underscores the increasing tension around US economic data and its impact on monetary policy, framing a critical backdrop for upcoming ECB discussions.
Where it sits in our coverage
Our consensus EUR/USD target currently sits at 1.1583 (median across 10 firms), with Morgan Stanley at the upper bound (1.2300) and Danske Bank at the lower end (1.1100). This outlook reflects a divergence among market participants regarding euro prospects against the dollar.
How firms align
Several firms align with the current bullish sentiment on the euro, including Deutsche Bank and Goldman, both targeting 1.1800 by March 2026, suggesting a structural optimism. Notably, JPMorgan's forecast of 1.1800 aligns closely with this view, as outlined in our internal coverage (/reports/jpmorgan). In contrast, BofA remains more conservative with a lower target of 1.1240 for the same timeframe.
What the data shows
Recent forecast revisions have shown an upward adjustment from several firms, with UOB outlining a target of 1.1536 for March 2026. This aligns with our previous insights, including the consensus check from August 9, which indicated a shift in sentiment toward the euro's strength (/research/eurusd-ecb-rate-path-2026-08-09).
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD trades at 1.1419 amid Fed recalibration.
- 02Market sentiment shifts towards the euro on weak US jobs data.
- 03Watch for ECB positions impacting euro forecasts especially around 1.1583 consensus.
Market implications
The immediate focus is on the 1.1583 consensus level, with market positioning likely to shift based on upcoming ECB communications. Traders should watch for any significant economic data releases that might reinforce or contradict current sentiment shifts.
Risks to this view
A stronger-than-expected US jobs report could invalidate this bullish euro outlook, reinforcing Fed rate hike expectations and potentially pulling EUR/USD lower through the 1.1400 support. Additionally, any surprising ECB policy tones might also reverse current sentiment.
Sources & References
How we cover this story
Other coverage on this pair
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