Euro: Pressured versus US Dollar with ECB repricing – Societe Generale
The Euro remains under pressure against the US Dollar amid shifting expectations regarding the European Central Bank's (ECB) monetary policy. Societe Generale highlights a market sentiment that is pricing in a less aggressive rate hike trajectory for the ECB compared to the tightening expected from the Federal Reserve. This divergence is crucial as it reflects ongoing uncertainties in the Eurozone's economic landscape, potentially impacting investor sentiment in the near term. With the current spot at 1.1500, these dynamics are leading to a bearish outlook for EUR/USD.
Where it sits in our coverage
Our consensus EUR/USD target currently stands at 1.1700 for March 2026, with a range from 1.1300 at Citi to 1.2000 at UBS. Societe Generale aligns with the consensus, predicting 1.1700 in March 2026, while forecasts from JPMorgan and Goldman suggest higher targets at 1.1800 and 1.1800 respectively.
How firms align
Firms like JPMorgan and Goldman Sachs are supporting the narrative of a stronger Euro, projecting 1.1800 for March 2026. Meanwhile, Bank of America presents a more cautious stance with a lower target of 1.1700, reflecting a divergence in sentiment that aligns inconsistently with the bearish view expressed by Societe Generale. See /research/jpmorgan for more on their rationale.
What the data shows
Recent revisions have seen ING raise its March 2026 target to 1.1900, while our published insights highlight that “EUR/USD Trades 4% Below Dec-26 Consensus: What the Gap Reveals,” emphasizing the challenges ahead for the Euro given the current market conditions.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD is currently at 1.1500, pressured by ECB repricing expectations.
- 02Recent forecasts show a stark divergence among firms regarding Euro strength.
- 03Key risk awaits from upcoming ECB signals that may solidify a bullish case for the Euro.
- 04Watch for any shifts in market sentiment that could alter the current bearish outlook.
Market implications
Traders should monitor the ECB's upcoming announcements as any shift in tone could impact EUR/USD significantly. With our consensus target at 1.1700 for March 2026, breaching this level could open the door for further gains if the ECB surprises with hawkish guidance.
Risks to this view
Should the ECB signal an unexpectedly aggressive tightening path, this could reverse the current bearish sentiment on the Euro, pushing EUR/USD beyond recent resistance levels. Additionally, a more robust economic indicator out of the Eurozone could counteract current bearish trends.
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: 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.
EUR/USD Price Forecast: 20-day EMA remains key barrier as Iran uncertainty persists
Euro slips as Hormuz firefight revives US Dollar demand
Geopolitical risk in Persian Gulf elevates safe-haven demand, likely to support USD/JPY parity and cap EUR/USD downside until tensions clarify.
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.