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FX BANK FORECAST · COVERAGE
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Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 36 institutional desks. No promotion.
FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 36 institutional desks. No promotion.
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.
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.
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
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
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.
| Firm | Stance | YE 2026 |
|---|---|---|
ING | Bullish | 1.1800 |
UOB | Bullish | 1.1800 |
Rabobank | Bullish | 1.1800 |
All 30 desk targets for EUR/USD
How we cover this story
Mixed US PCE reduces Fed rate-cut conviction, supporting USD carry flows and widening the rate differential favoring dollar positioning.
ECB tightening cycle expectations support EUR/USD mean reversion from recent lows; rate differential narrows USD carry advantage.
ECB Schnabel's hawkish messaging reinforces market expectations of elevated rates, supporting EUR/USD near-term bid.
EUR/USD spot sits just 0.22% below the 30-firm Dec-26 consensus of 1.17, yet a 0.14 dispersion range signals deep disagreement on the path.
EUR/USD spot sits at 1.1663, just 0.32% below the 30-firm median Dec-26 target of 1.17, masking a 0.14 range of dispersion across the panel.
EUR/USD spot sits within 0.06% of the 30-firm Dec-26 consensus median of 1.1684, masking a 0.14 range between Citi's 1.10 floor and Nordea's 1.24 ceiling.
30 investment banks see EUR/USD at 1.1657 by Dec 2026
View the live EUR/USD forecastGS |
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