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FX BANK FORECAST · COVERAGE
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Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 37 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 37 institutional desks. No promotion.
The US dollar is receiving a boost from a hawkish stance adopted by the Federal Reserve, which narrows the policy divergence between the Fed and the European Central Bank (ECB). As a result, the euro is under pressure against the dollar, evidenced by current trading levels near 1.1446. The outlook for USD/EUR suggests continued support for the dollar, particularly in light of the Federal Reserve's commitment to tackling inflation. This environment underscores the need for investors to reassess their positions as macroeconomic conditions evolve.
Our consensus EUR/USD target currently sits at 1.1700 (median across firms) for March 2026, with firms like SocGen projecting 1.1700 and Investec at 1.1455. In contrast, other firms show a broader range, with targets varying from 1.1200 to 1.2300, indicating varying sentiments towards the euro's strength against the dollar.
Danse Bank's projection of 1.1866 for March 2026 suggests a more bullish outlook for the euro against the dollar, contrasting with other firms like RBC, which estimates a target of 1.1600. Both firms reflect differing responses to the current macroeconomic dynamics, as highlighted in our internal reports on EUR/USD divergence. For more context, see /research/eurusd-ecb-rate-path-2026-09-16.
Recent revisions from firms such as BNP Paribas, which adjusted its March 2026 target to 1.1600, reinforce a cautious sentiment surrounding the euro. Our prior analyses, including /research/eurusd-ecb-rate-path, demonstrate that the market is still pricing in significant spreads between current spot levels and the consensus forecasts.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
Market implications
Investors should monitor the upcoming ECB meeting for signs of policy direction that could impact euro valuation. Current resistance at our consensus target of 1.1700 could be a critical level to watch for positioning shifts in the market.
Risks to this view
A shift in the Fed's hawkish outlook or stronger-than-expected economic data from the Eurozone could invalidate the current bullish stance on the dollar. Additionally, any unexpected policy shifts from the ECB could lead to euro strength that may challenge USD resistance levels.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
How we cover this story
Fed hawkishness creating fresh EUR/USD selling pressure suggests market repricing higher-for-longer USD rates relative to ECB policy trajectory.
Rising yields supporting USD strength; EUR/USD trading below 1.15 suggests market repricing of relative rate differentials favors dollar appreciation.
Hawkish Fed guidance supports USD strength and widens rate differential favoring dollar positioning into week-end.
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EUR/USD trades 1.69% below the 30-firm median Dec-26 target of 1.1684, with a 0.14 range separating Nordea's 1.24 bull case from Citi's 1.10 floor.
EUR/USD spot at 1.1475 sits 1.79% below the 30-firm Dec-26 consensus of 1.1684, with a 0.14 spread separating the most and least bullish desks.
EUR/USD spot sits 1.78% below the 30-firm median Dec-26 target of 1.1684, with a 0.14 range separating the most and least bullish desks.