Morning briefing: EUR/USD weakens ahead of the ECB policy meetings
The EUR/USD pair is weakening as the market anticipates forthcoming monetary policy decisions from the Federal Reserve and the European Central Bank. Trading above 102, the Dollar Index reflects bullish sentiment for the USD, while the euro is under pressure, suggesting that traders are pricing in a more cautious ECB stance amid higher expected rate cuts. This backdrop highlights potential vulnerabilities for the euro, particularly as expectations diverge more significantly from what USD policy outcomes suggest.
Where it sits in our coverage
Our consensus target for EUR/USD currently sits at 1.1500 (median across 12 firms), with Commerzbank holding the upper bound at 1.2200 and BofA at the lower end with 1.1200. The prevailing market sentiment favors downward movement in the euro against the dollar, a view echoed in our latest coverage.
How firms align
Firmen such as Nomura and CIBC project March 2026 targets of 1.1700 and 1.1866, respectively, aligning closely with the bearish sentiment indicated by current market movements. Meanwhile, BofA’s conservative estimate of 1.1200 portrays a distinctly bearish outlook, contrasting with broader market sentiment.
What the data shows
Recent forecast revisions underscore a weak euro outlook, with Stanchart marking the March 2026 target at 1.1400, indicating a bearish shift. Our published research on the ECB decision preview signals potential challenges for the euro, as discussed in /research/ecb-decision-preview-2026-10-29.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01EUR/USD trades at 1.1253, reflecting ongoing bearish sentiment.
- 02Market pricing suggests ECB rate cuts may exceed USD dollar policy adjustments.
- 03Watch for Fed and ECB policy decisions as key catalysts for EUR/USD movement.
Market implications
Looking ahead, traders should monitor the ECB meeting scheduled for tomorrow to gauge any changes in rate outlook, especially as our consensus sits at 1.1500. A break below 1.1200 could signal more significant downside risks for the euro.
Risks to this view
A more hawkish ECB stance that surprises the market could invalidate the current bearish outlook for EUR/USD. If the ECB signals a commitment to maintaining rates, it could shift positioning back toward the euro.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
Other coverage on this pair
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