EUR/USD: Gradual rise to 1.22 by year-end – Commerzbank

Commerzbank’s strategy team keeps a constructive view on the Euro versus the Dollar, forecasting EUR/USD at 1.19 in Q1 2026 and a gradual rise to 1.22 by year-end. The bank sees robust US growth near 3% and a solid Euro area backdrop, but expects Fed to cut rates to 2.75% by the end of the first quarter next year, while the ECB holds at 2.0%, supporting a moderately higher EUR/USD over the forecast horizon.

Euro seen grinding higher versus Dollar

"Our economists have revised up their above-consensus US GDP forecast for 2026 further to 3.0% from 2.7%."

"ECB keeps rates unchanged at 2%, Fed cuts to 2.75% by March next year, BoE cuts to 3.25% by summer, BoJ hikes to 1.25% by year-end."

"12-Feb-26 EUR/USD 1.19 2026 Q1 1.19 Q2 1.20 Q3 1.22 Q4 1.22."

"Due to favourable financing conditions, the US economy should continue to expand solidly in 2026, but at a slightly slower pace."

"In light of the structural changes amid multiple crises (extensive state intervention, debt build-up, de-globalisation, war), the long-term prospects for sustainably higher growth should remain muted amid structurally higher inflation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)