FX Talking: Forecast table
The desk interprets ING's latest FX forecast as signaling a potential upward trend for the dollar, particularly against the euro, amidst expectations of sustained Federal Reserve interest rates. Per the full note source, the commentary emphasizes macroeconomic factors such as inflation persistence that could lead to a longer duration of elevated rates. This outlook is further supported by recent labor market data that indicates resilience. The anticipated trade balance improvement in Q4 may also bolster dollar strength, signaling traders should watch how positions evolve ahead of any significant economic data releases.
What the desk is arguing
The thesis presented is that the dollar may strengthen due to geopolitical tensions alongside robust economic indicators that influence central bank policies. Per the full note source, the focus is on inflation and labor market developments as key drivers.
Evidence supporting this outlook includes the recent trends in U.S. labor statistics, where job growth surpassed expectations. As a result, the Federal Reserve may maintain its hawkish stance longer than previously anticipated, putting upward pressure on the dollar against major currencies.
The alternative read would be if incoming economic data starts showing signs of significant downturns, which may lead to market reassessments on the Fed's policy direction.
Where it sits in our coverage
Currently, our consensus target for EUR/USD sits at 1.075, although projections from key firms suggest a variance in expectations: - jpmorgan — 1.10 (Mar-26) - bofa — 1.04 (Mar-26) This positioning indicates we are discerningly towards the mid to upper end of the spread, reflecting a relatively strong dollar outlook.
How other firms see it
Firms aligned with our perspective include jpmorgan, advocating a cautious bullish stance on the dollar based on recent data. In contrast, bofa maintains a bearish outlook, potentially viewing the macroeconomic landscape as more unstable. Eyes should also be on related currency pairs, particularly EUR/USD, as shifts there could mirror the Eurozone’s economic recovery trajectories.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Dollar expected to strengthen amidst hawkish Fed signals.
- 02Recent labor statistics indicate resilience in the U.S. economy.
- 03Opposing views suggest potential bearish reversals if economic data worsens.
- 04Trade balance improvements could further support dollar gains.
Market implications
Traders should monitor the 1.075 level for EUR/USD closely, as this could serve as a key support or resistance point reflecting market sentiment. The upcoming labor data could catalyze shifts in positioning if results vary significantly from expectations.
Risks to this view
The outlook could be invalidated by unexpectedly weak economic indicators, particularly in the labor market or inflation metrics, which may lead the Fed to pivot towards a more accommodative policy stance.
Articles FX Talking: Forecast table 08:18 FX Talking Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download The latest FX forecasts from our team Chris Turner The latest FX forecasts from our team Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Author Chris Turner Global Head of Markets and Regional Head of Research for UK & CEE Chris is Global Head of Markets and Regional Head of Research for UK & CEE.
Together with his team, he provides short and medium-term FX recommendations for ING's corporate and…
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FX Talking: Forecast table