Eurusd Can Drop Citigroup

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Eurusd Can Drop Citigroup

EUR/USD Can Drop To 1.10

The EUR/USD forecast by Citigroup reveals the pair is at risk of falling towards the 1.10 level. This is a little different from most other analysts, as everyone else is forecasting a bearish US Dollar.

While the markets are expecting a weaker USD in 2026, the Citigroup forecast tells us a different story. According to them, the Euro will lose its ground against the greenback in 2026.

ECB Will Not Cut Interest Rates

Citigroup added that the upside in the EUR/USD will remain limited. Meanwhile, the bearish forces will continue to steer the EUR/USD pair this year.

By mid-2026, the EUR/USD pair will slide all the way towards 1.10. Citi expects the EUR/USD pair to stay under the influence of cyclical developments.

Citi commented that the US is all set to deliver a strong economic performance. So, it will prop up the US Dollar, and that will eventually push the Euro and Dollar pair lower.

The bank also pointed out that the labor market will go through a period of distortions. This will be due to Trump's immigration policies, which will push the employment numbers lower.

In turn, this will send the wages higher in the large companies. But the most impacted will be the smaller companies, where the employment will dip further.

As for the US Federal Reserve, the bank thinks that the notion of fast rate cuts in 2026 is not true. They added that the new Fed chair will not be able to justify rate cuts if the economic conditions are not ideal.

Citigroup thinks that the European Central Bank will not cut rates in 2026. However, this will not support the Euro as the good news is already priced in.

Also, the higher defense spending in the Eurozone will not support the Euro currency. The reason is that the procurement of defense equipment will be done overseas, and thus it will not support the Euro.

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