Euro to Dollar Rate Forecast: Polled Analysts See 1.20 in a Year

Published: Sunday, 10 August 2025 14:30 BST - Written by Frank Davies

STORY LINK Euro to Dollar Rate Forecast: Polled Analysts See 1.20 in a Year

The Euro to Dollar (EUR/USD) exchange rate could climb to 1.22 by the end of 2026, according to ING, as the US dollar comes under sustained pressure from interest rate cuts. A new Reuters poll points to a 12-month consensus forecast of 1.20 – the most optimistic since October 2021.

Key Forecasts

• ING: EUR/USD at 1.22 by end-2026; three Fed cuts in Sep, Oct, Dec 2025.
• Reuters Poll: 12-month consensus at 1.20.
• Nordea: Market pricing in “more cuts than are likely to materialise.”

There were no major economic data releases during the week with markets still debating the outlook following the weak jobs data at the beginning of August.

Federal Reserve personnel and policy remained a key element during the week.

President Trump nominated Stephen Miran to fill the vacant FOMC seat until the end of January.

Miran has previously called for lower interest rates and called for the overvalued dollar to be weakened and his nomination did undermine the US currency.

It was still uncertain who would be nominated as the next Fed Chair with some reports that Trump would select current Governor Waller.


Markets remain very confident of a rate cut in September with three cuts by the end of 2025.

According to Commerzbank; “During the last Fed meeting, Christopher Waller and Michelle Bowman had already voted in favour of lowering the key interest rate. With Miran, another vote would now be added.”

MUFG put the nomination in perspective; “Miran’s influence given market expectations already will be marginal.”

It added; “Still, the choice of Miran – someone very close to Trump – is a signal that Trump’s permanent pick will likely be some close and loyal which will certainly be a factor we think that will weigh on US dollar performance.”

ING looked at the labour market data; “The July US jobs report, especially the heavy back-month revisions, severely undermined the Federal Reserve’s position that the jobs market was ‘solid’. The Fed’s 21-23 August Jackson Hole event could now see the central bank formally swing behind policy easing.

It added; “We now look for 25bp cuts at the September, October and December meetings.”

Nordea is sceptical that market expectations of five rate cuts by the end of 2026 is realistic; “We believe the market is pricing in more cuts than are likely to materialise, primarily because we don’t expect unemployment to rise as much as the Fed or the market currently anticipates.”


The bank noted that foreign-born workers have fallen by as much as 1.6 million since March.

Nordea added; “If this trend continues, break-even job growth could fall to just 10,000 jobs per month by the end of 2026, or even turn negative. That would mean job growth could slow drastically — or even turn negative — without causing unemployment to rise.”

Markets will also monitor the implications of US trade policies with uncertainty over the impact of US tariffs.

Geo-political influences will also be significant with another attempt to secure a Ukraine ceasefire.

According to ING; “Risks to our bullish call from 1.20 mainly come from: a) a very dovish European Central Bank, or b) secondary sanctions on Russia, prompting a large sell-off in emerging currencies and a weaker risk environment.”

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TAGS: Euro Dollar Forecasts