Eurusd Forecast Deutsche Bank

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Eurusd Forecast Deutsche Bank

EUR/USD To Touch 1.25 By End 2026

The EUR/USD pair is in a bearish trend in the short to medium term. This is mainly due to fresh Dollar demand and high energy prices.

The high energy prices, in particular, are hurting the Euro. However, Deutsche Bank thinks this strength in the US Dollar is short-term, and the EUR/USD will trend higher in the long term.

The US Dollar Is Overvalued

Deutsche Bank has set the end-of-2026 target for the EUR/USD at 1.25. This is a bullish forecast and highlights that some serious upside is ahead for the Euro in the coming months.

The bank also added that the US Dollar is a little too strong in historic terms. They added that the US Dollar is trading 16% above its long-term average. This clearly highlights that the US Dollar is set for further net losses during the remaining of 2026.

The bank commented on how US exceptionalism is slowly coming to an end. So, a natural reaction to this would be a weakening of the US Dollar against the Euro and other currencies.

If we look at the last 2 years, the US received strong capital inflows. But just because there is no Sell America narrative doesn't mean the US Dollar will not trend lower.

The geopolitical tensions, economic situation and the fact that the currency is overvalued are enough for EUR/USD to move higher. Sure, some of these things will also affect the Euro, but their effect will be more visible in the US Dollar.

And if there are net US outflows, it will only add fuel to the fire. In that case, there's a chance for the US Dollar to move even lower than 1.25.

In fact, the story of the US Dollar's weakness will not just be limited to the EUR/USD pair. Analysts think the US Dollar will be a net loser against GBP, JPY, and other major currencies.

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