Deutsche Bank sees euro rising to 1.25 end-2026 (global growth, Europe recover, soft USD) - investingLive
The desk anticipates a bullish trajectory for the euro, projecting a rise to 1.25 by the end of 2026, driven by global economic recovery and a softening U.S. dollar. Per the full note from Deutsche Bank, this outlook hinges on expectations of improved growth in Europe and a shift in market sentiment favoring the euro. The potential for a weaker dollar, influenced by U.S. monetary policy adjustments, further supports this bullish stance. Current positioning suggests that traders are beginning to align with this view, reflecting a broader market sentiment shift.
What the desk is arguing
Deutsche Bank anticipates that the euro will climb to 1.25 by the end of 2026, driven by an overall recovery in global growth, particularly across Europe, and a softening of the US dollar. This bullish outlook highlights a belief in stabilizing European economies as they exit the pandemic's economic constraints, alongside a projected decrease in USD strength as Federal Reserve policies potentially shift.
The analysis suggests that the euro's upward movement is contingent on macroeconomic conditions improving notably in the region while concurrently expecting the USD to remain under pressure given the anticipated easing in US interest rate policies. Implicitly, Deutsche Bank is rejecting the scenario where the dollar strengthens significantly, which would counteract their bullish euro view.