Euro-Dollar 2023 Target 1.1700, Deutsche Bank Looking For Opportunities To Buy EUR/USD - Exchange Rates UK
The desk is positioning for a bullish outlook on EUR/USD, targeting 1.1700 by year-end 2023, as articulated by Deutsche Bank's recent commentary. This perspective is underpinned by expectations of a potential shift in monetary policy dynamics, particularly as the European Central Bank (ECB) may adopt a more hawkish stance relative to the Federal Reserve. Per the full note source, Deutsche Bank is actively seeking opportunities to buy EUR/USD, suggesting a growing conviction in the euro's strength against the dollar.
What the desk is arguing
The desk maintains a bullish stance on EUR/USD, supported by consensus forecasts indicating a gradual appreciation of the Euro. Current market dynamics, coupled with fiscal policies in the Eurozone, are expected to drive the currency pair higher, targeting levels up to 1.2200 by December 2026.
This outlook is reinforced by several banks projecting similar gains in the Euro against the Dollar. The desk implicitly rejects the notion that the Euro will struggle to maintain its strength against the Dollar amid potential economic pressures, emphasizing the resilience of the Eurozone economy instead.
Where it sits in our coverage
In our coverage, the current consensus target for EUR/USD is 1.2200 by December 2026, with a range spanning from 1.1700 to 1.2500. This aligns with Deutsche Bank's target of 1.2500 for the same period, underscoring a common belief among analysts that the Euro will continue to strengthen against the Dollar over the next several years.
Notable target projections from other firms include: - JPMorgan: Dec26 target at 1.2000 - Goldman: Dec26 target at 1.2500 - Morgan Stanley: Dec26 target at 1.1600
How other firms see it
There is general alignment among major firms regarding the bullish outlook for EUR/USD, with many predicting similar upward movements over the forecast horizon.
- JPMorgan projects 1.2000 for Dec26, affirming a positive sentiment.
- Goldman is particularly optimistic, anticipating a target of 1.2500.
- BofA holds a slightly more conservative stance but still estimates a rise to 1.2200 by Dec26.
Conversely, Morgan Stanley has set a lower target of 1.1600, indicating a more cautious approach to the Euro's strength going forward.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Deutsche Bank projects EUR/USD to reach 1.1700 for 2023, indicating a positive outlook.
- 02Current consensus targets range from 1.1700 to 1.2500, reflecting overall bullish sentiment for the Euro.
- 03Most firms, including JPMorgan and Goldman, align with the positive outlook, while only Morgan Stanley expresses caution.
Market implications
The bullish projections on EUR/USD could lead to increased demand for Euro-denominated assets and influence potential adjustments in ECB monetary policy. If the Euro strengthens as anticipated, it may also affect trade balances and economic relations with the US.
Risks to this view
The main risks to this bullish outlook include potential geopolitical tensions and economic shocks that could adversely impact Eurozone growth. Additionally, shifts in US monetary policy could create volatility in the EUR/USD pairing.
Sources & References
How we cover this story
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