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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.
Goldman Sachs has revised its EUR/USD forecasts higher, aligning with a growing consensus that the euro will strengthen against the dollar over the medium term. The revision comes amid shifting expectations for ECB and Fed policy divergence.
Goldman Sachs has raised its EUR/USD forecasts, rolling them higher across all tenors. This move signals conviction that the euro's recent resilience is more than a tactical bounce—it reflects a structural repricing of rate differentials and growth expectations.
Supporting this thesis, the revision comes just days after the ECB signaled a potentially slower easing cycle, while the Fed's data dependency has left the dollar vulnerable to softer prints. Goldman’s new Dec26 target of 1.25 is now among the most bullish on the Street.
Importantly, Goldman is implicitly rejecting the view that US exceptionalism will dominate through year-end. Instead, they see the eurozone fiscal expansion and narrowing rate spreads as the dominant drivers.
Our aggregated consensus for EUR/USD Dec26 stands at 1.2200, with a firm spread from 1.1600 (Morgan Stanley) to 1.2500 (Goldman Sachs, Deutsche Bank). Goldman's revised 1.2500 sits at the top of that range, making it an outlier on the upside. Our own published work on the 'consensus gap' highlights that spot at 1.1500 trades well below consensus, which we view as a contrarian opportunity.
Key firm targets for Dec26 are: - Goldman Sachs: 1.2500 - Deutsche Bank: 1.2500 - MUFG: 1.2400 - Morgan Stanley: 1.1600 (bullish near-term but bearish long)
Goldman Sachs is joined by Deutsche Bank (both at 1.2500 for Dec26) in the bullish camp. MUFG also leans bullish at 1.2400, while ING and BofA are moderately bullish at 1.2200. This cluster of banks expects euro strength on valuation and policy convergence.
On the contrary side, Morgan Stanley stands out with a Dec26 target of 1.1600, implying a retreat from near-term optimism. Their view likely hinges on renewed dollar strength if the Fed holds rates higher for longer. Barclays at 1.2100 and JPMorgan at 1.2000 are also comparatively cautious relative to Goldman.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
Market implications
The revision reinforces the bullish euro narrative, potentially accelerating short covering in EUR/USD. If other firms follow suit, the median consensus may drift higher, increasing the risk of a squeeze toward 1.20+. However, the wide dispersion (1.16-1.25) suggests continued debate.
Risks to this view
Risk centers on Fed hawkishness or a resurgence in US data that delays rate cuts, which would support the dollar and disprove the euro-bullish view. Additionally, escalation of trade tensions or geopolitical shocks in Europe could undermine the euro.
| 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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