EUR/USD Forecast: UBS Predicts Powerful Surge to 1.20 as Dollar Weakens in 2025 - CryptoRank
UBS projects a powerful surge in EUR/USD to 1.20 as the dollar weakens in 2025, a bullish view that aligns with the consensus but exceeds near-term targets. The call diverges from some firms like Morgan Stanley, which expects a decline by year-end.
What the desk is arguing
UBS forecasts EUR/USD to reach 1.20 by 2025, driven by a weakening dollar. This is a decidedly bullish call that implies a 5% rally from spot around 1.1500.
The thesis rests on expectations of Fed easing and a narrowing rate differential. UBS sees the dollar's structural overvaluation correcting, providing sustained support for EUR/USD.
The desk implicitly rejects the notion that Eurozone headwinds or geopolitical risks will cap gains. Instead, it positions EUR/USD as a key beneficiary of dollar weakness in 2025.
Where it sits in our coverage
Our consensus for Dec-26 stands at 1.2200, with a range of 1.1600 (Morgan Stanley) to 1.2500 (Goldman Sachs, Deutsche Bank). UBS's 1.20 target is below the consensus but within the range, suggesting a bullish but not extreme view.
Firms with Dec-26 targets above 1.20 (aligned with UBS's bullish stance): - Goldman Sachs: 1.2500 - Deutsche Bank: 1.2500 - MUFG: 1.2400 - ING: 1.2200 - BofA: 1.2200 - Barclays: 1.2100
Firms with Dec-26 targets at or below 1.20 (less bullish or bearish): - JPMorgan: 1.2000 - Morgan Stanley: 1.1600
How other firms see it
Goldman Sachs shares the bullish outlook with a 1.2500 Dec-26 target, the highest among peers. Deutsche Bank and MUFG also align, forecasting 1.2500 and 1.2400 respectively.
In contrast, Morgan Stanley is the lone bear, targeting 1.1600 by Dec-26, implying a decline from current levels. JPMorgan and Barclays are more conservative, with targets of 1.2000 and 1.2100, neither fully endorsing UBS's surge call.
Overall, the majority of banks lean bullish, but the degree of conviction varies sharply, with UBS's 1.20 call sitting near the lower end of the bullish consensus.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01UBS predicts EUR/USD to surge to 1.20 in 2025 on dollar weakness, aligned with consensus but below the 1.22 median.
- 02Firms like Goldman, Deutsche Bank, and MUFG are more bullish with Dec-26 targets above 1.22, while Morgan Stanley is bearish at 1.16.
- 03The call hinges on Fed easing and a weaker dollar, ignoring risks like Eurozone slowdown or geopolitical tensions.
Market implications
If UBS's forecast materializes, EUR/USD would test key resistance at 1.20, breaking above the 2023-2024 trading range. This would trigger momentum-driven buying, potentially pushing the pair toward consensus 1.22 targets. Conversely, failure to hold above 1.15 could invite bears back toward the 1.12-1.14 zone.
Risks to this view
Risks include a more resilient US economy delaying Fed cuts, Eurozone recession dragging the euro lower, or a geopolitical shock boosting the dollar. The consensus gap to spot suggests the market is already pricing some weakness, so a sudden shift in Fed stance could upend the bullish view.
EUR/USD — All Desk Targets
| Firm | Stance | YE 2027 |
|---|---|---|
Goldman Sachs | Bearish | 1.1200 |
UOB | Neutral | 1.1450 |
Citi | Bearish | 1.1000 |
Sources & References
How we cover this story
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