Deutsche Bank Euro To Dollar Year Ahead Forecast: EUR/USD Tipped At 1.25 By End 2026 - Exchange Rates Org UK

What the desk is arguing

The desk supports the view articulated by Deutsche Bank, suggesting that the EUR/USD could reach 1.25 by the end of 2026. This expectation is driven largely by a potential easing of the Federal Reserve's aggressive interest rate stance, alongside sustained economic growth in the Eurozone.

While current consensus targets indicate a more cautious trajectory with forecasts mostly clustered around the 1.18 to 1.22 range by December 2026, the Deutsche Bank forecast highlights an opportunity for upward movement, countering those analysts predicting a stagnant or depreciating Euro.

Where it sits in our coverage

Our internal consensus target for EUR/USD places December 2026 at 1.2200, with a spread among major firms ranging from 1.1600 to 1.2500. This appears relatively conservative compared to Deutsche Bank's projection, yet it reflects realistic expectations in light of macroeconomic indicators and interest rate differentials.

Notably, several firms have varying views on the pair's outlook: - **JPMorgan**: Dec26 1.2000 - **Goldman**: Dec26 1.2500 - **Morgan Stanley**: Dec26 1.1600 These targets suggest a spectrum of expectations, with Goldman’s forecast leaning towards more optimism, potentially aligning more closely with Deutsche Bank's outlook than the others.

How other firms see it

In the current landscape, several firms present forecasts that align closely with the outlook but differ slightly in magnitude. These include **Deutsche Bank** and **Goldman**, both projecting a stronger Euro trajectory by December 2026.

Conversely, firms like **Morgan Stanley** and **Barclays** have adopted a more cautious demeanor, forecasting values closer to 1.1600 and 1.2100 respectively. The divergence in these perspectives highlights the uncertainty in how evolving economic conditions and monetary policies may affect the EUR/USD exchange rate.