Euro to Dollar Week Ahead Forecast: EUR/USD Hits 6-Week Best

Modified: Monday, 20 April 2026 09:01 BST - Written by David Woodsmith

STORY LINK Euro to Dollar Week Ahead Forecast: EUR/USD Hits 6-Week Best

The Euro to Dollar exchange rate (EUR/USD) has pushed above 1.1800 to six-week highs, as the dollar weakened amid easing geopolitical tensions and renewed doubts over US policy credibility.

While markets have priced in optimism over a potential Iran resolution, analysts warn that near-term upside may be limited, even as the broader outlook remains tilted towards further EUR/USD gains.

EUR/USD Forecasts: Dollar vulnerability

ING is still backing year-end Euro-to Dollar (EUR/USD) gains to 1.20

Nordea is forecasting stronger EUR/USD gains to 1.25 at the end of this year.

EUR/USD secured net gains to a 6-week above 1.18 with the dollar index at the lowest level since early March. Markets overall took an optimistic stance on the Iran conflict with hopes that a ceasefire would be extended with progress towards a more decisive deal.

There is still a high degree of uncertainty over the Iran situation. Rabobank commented; “EU and GCC officials have predicted that a deal between the US and Iran may take close to 6 months as counterparties argue back and forth on the subject of enriching uranium and developing nuclear capabilities.”

ING doubts the Euro can make further near-term headway; In the shorter run, we see risks mildly tilted on the downside for EUR/USD, and we target 1.170 for the end of the second quarter. Markets have already leaned aggressively into the de‑escalation trade.”

The dollar was also hampered by fresh reservations over Federal Reserve policy with President Trump again threatening to fire Chair Powell if there is a delay in appointing Warsh as his replacement and Powell stays as chair.

According to ING; “If anything, risks sit on the upside relative to our 1.20 year‑end target, as the ECB might end up delivering two hikes after all and political uncertainty building into the November midterms could trigger more US‑specific dollar weakness. And if Republicans lose both houses of Congress, limits on Trump’s ability to pursue new fiscal stimulus could reinforce structurally bearish views on the dollar.

Nordea is also bearish on the dollar; “Confidence in the US government has not improved in recent weeks – quite the opposite – which could weigh further on the dollar in the years ahead.”

It added; “Our broader narrative has been that dollar weakness over the coming years will, in part, be driven by a reallocation away from US assets and towards other investment opportunities.”

MUFG notes the importance of economic developments; “The only scope for a notable gain for the dollar would be if we saw a period of strong risk-off on global recession being priced that would result in a big decline in global equities of around 20%. That’s still a considerable risk and as time passes the impact of the supply disruption will become more evident.”

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TAGS: Euro Dollar Forecasts