EUR/USD Forecast: UBS Predicts Powerful Surge to 1.20 As Dollar Weakens in 2025 - Binance
UBS's forecast of EUR/USD reaching 1.20 in 2025 suggests a significant depreciation of the US dollar amidst a strengthening Eurozone economy. This view aligns with existing predictions from various banks, indicating a consensus that the euro will likely appreciate against the dollar over the next couple of years.
What the desk is arguing
UBS's prediction for a powerful surge of the EUR/USD to 1.20 in 2025 is supported by a general expectation of dollar weakness as interest rate adjustments play out. The anticipated recovery in the Eurozone is set to enhance the euro's appeal, paralleling the dollar's expected decline as the US navigates potential economic headwinds.
Current market sentiment reflects this outlook, with consensus projections placing the EUR/USD significantly higher than its current spot at 1.1500. Notably, many institutions are increasingly aligning their targets toward this bullish trajectory for the euro against the dollar, underscoring confidence in the euro's relative strength moving forward.
Where it sits in our coverage
Our internal consensus for EUR/USD suggests a target of 1.2200 by December 2026, with varying forecasts from peers indicating a range from 1.1700 to 1.2500. This consensus aligns with UBS's view, reinforcing the notion that the EUR/USD could strengthen considerably in line with their forecast.
Notable targets from key firms include: - **JPMorgan**: Dec26 target at 1.2000 - **Goldman**: Dec26 target at 1.2500 - **Deutsche Bank**: Dec26 target at 1.2500
How other firms see it
Several firms are in agreement with UBS's stance, forecasting strength in the euro against the dollar. For instance, **ING** and **Morgan Stanley** also have bullish projections for the EUR/USD, signifying a widespread expectation of euro appreciation.
Conversely, **BofA** remains comparatively cautious, suggesting a lower target of 1.2200 for December 2026, indicating a more tempered outlook on euro strength amidst potential volatility.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01UBS predicts EUR/USD will reach 1.20 in 2025 due to dollar weakness.
- 02The current market consensus leans towards a bullish outlook for the euro.
- 03Several banks have increased their EUR/USD forecasts, aligning with UBS's optimistic view.
Market implications
Should EUR/USD rise towards 1.20 as UBS predicts, it could lead to shifts in investment strategies towards Euro-denominated assets, impacting foreign exchange flows and potentially driving higher demand for euro assets across global markets.
Risks to this view
The primary risks to this forecast include unexpected shifts in US monetary policy, geopolitical tensions, or economic disruptions that could impact the dollar's strength or the eurozone's recovery trajectory.
Sources & References
How we cover this story
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Cross-firm research
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EUR/USD spot at 1.1727 sits 3.87% below the eight-firm median Dec-26 target of 1.22, exposing a structural divergence that demands explanation.
EUR/USD Consensus at 1.22 While Spot Sits 3.87% Below
Eight sell-side firms hold a median Dec-26 target of 1.22 for EUR/USD while spot trades at 1.1727, a gap that demands explanation.