FX Talking: Forecast table
The latest FX forecasts from ING suggest a cautiously optimistic outlook for the euro, aligned with the expectations of stability from the European Central Bank (ECB). Per the full note from Chris Turner and Francesco Pesole, despite recent volatility, the euro is anticipated to remain supported around 1.075. The desk highlights that ongoing macroeconomic indicators and central bank policy decisions are crucial for this trajectory, as any hint of a more hawkish stance from the ECB could further bolster the euro against the dollar and other currencies. As we look down the road, major market events are currently sparse, leaving room for reaction to minor data shifts.
What the desk is arguing
The ING research team posits that the euro will find support near 1.075, capturing the market’s reaction to the ECB's monetary policy direction. Their projections are underpinned by macroeconomic resilience in the Eurozone, which is somewhat at odds with market sentiment that has been skittish amid geopolitical tensions.
Recent data has shown steady inflation readings in the euro area, which aligns with the ECB's policy goals. This could support the expectation that the ECB will maintain its rate-hiking trajectory in a measured manner, reinforcing positive sentiment towards the euro.
Where it sits in our coverage
Our current consensus for the euro (EUR/USD) is pegged at 1.075, with the following individual firm targets: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
ING's forecast of 1.075 aligns well with our range; however, it leans towards the central pivot amidst somewhat diverging views. The targets highlight a bullish sentiment from jpmorgan compared to a more cautious outlook by bofa.
How other firms see it
The majority view, represented by firms such as jpmorgan, leans towards a strengthened euro in contrast to the bearish outlook from bofa. This bifurcation signals a market split on how upcoming economic data and ECB policy will impact euro dynamics.
Related currency pairs to monitor include EUR/GBP and EUR/JPY, particularly as ECB decisions influence these pairs amid relative performance metrics between their respective central banks. Understanding these nuances will be vital for directional trades.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01ING forecasts EUR/USD to stabilize around 1.075.
- 02The ECB's monetary stance continues to support euro resilience.
- 03JPMorgan is notably more bullish compared to BofA's cautious projection.
- 04Geopolitical tensions may create volatility in currency pairings.
Market implications
Traders should keep a keen eye on the 1.075 level, as a break or hold could signal bullish or bearish sentiment going forward. Lack of significant calendar events in the near term presents an opportunity for traders to capitalize on potential technical setups based on preliminary data releases.
Risks to this view
Key risks to this outlook include unexpected shifts in ECB communication or economic indicators that suggest a downturn in inflation or growth. A pivot towards a more dovish stance from the ECB could force a reevaluation of euro targets and lead to corrections.
Articles FX Talking: Forecast table Published 11:00 Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download The latest FX forecasts from our team Chris Turner and Francesco Pesole Source: Refinitiv, ING Forecasts "> Source: Refinitiv, ING Forecasts FX Talking 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 Authors 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… Francesco Pesole FX Strategist Francesco is an FX Strategist and has been with the firm since May 2019. His main focus is on the G10 space and, in particular, on European and commodity currencies. He began his career at Credit…
Sources & References
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