Euro to Dollar Price Forecast: Energy Fears Push EUR/USD Towards 1.10

Modified: Monday, 19 October 2026 10:01 BST - Written by David Woodsmith

STORY LINK Euro to Dollar Price Forecast: Energy Fears Push EUR/USD Towards 1.10

The Euro to Dollar exchange rate (EUR/USD) has recovered above 1.1200 after falling to 17-month lows below 1.1120, but elevated energy prices and French fiscal concerns continue to weigh on the single currency.

Société Générale forecasts a decline towards 1.10 before a recovery next year, although the bank believes much of the bad news may already be reflected in the Euro's valuation.

EUR/USD Forecasts: Energy fears in focus

SocGen has a year-end Euro to Dollar (EUR/USD) exchange rate forecast of 1.10 before a recovery to 1.16 by the third quarter of next year.

The bank noted underlying Euro vulnerability; “Elevated energy prices are as bad for the Euro now as they were in 2022/23. In short, the backdrop is unambiguously negative and, for now, the Euro remains vulnerable.”

EUR/USD slumped to 17-month lows below 1.1120 during the week before a recovery to above 1.12.

Despite a tentative recovery, Lloyds Bank still considers that EUR/USD is on track for losses to the 1.10 level; “That hasn’t done much to temper oversold conditions, but that is really the only thing the bulls have to claw at here. Lower targets, down at 1.1065 and 1.1008 are still the primary draw.

According to ING; “EUR/USD is set to stay offered in a 1.10-1.15 range. The main risk to the upside stems from uncertain White House policy post the November midterm elections.”

Energy prices, Fed expectations and US elections will be key elements. Brent crude jumped to 4-month highs during the week which curbed the Euro recovery attempt and reinforced concerns over the Euro-Zone economic outlook. There were also increased tensions surrounding Ukraine.

Headline US inflation increased to 3.7% from 3.4% and above consensus forecasts of 3.6% while the core inflation rate increased to 2.6% from 2.4%.

The data initially triggered sharp dollar gains, but then reversed course as equities came under pressure. In particular, there were fears that the AI sector was at risk of a sharp correction.

Markets are now expecting that interest rates will not be increased in October.

According to Credit Agricole; “The reaction likely reflected market worries that the concurrent equity market jitters centred on technology stocks have tightened US financial conditions and reduced the need for aggressive Fed hikes.”

Traders are still convinced that the Fed will hike rates in December.

ING still expects a firm underlying dollar tone; “A clear macro or market catalyst is needed for a reversal, and we do not see one. Fed tightening expectations remain stickier than those for most other central banks, limiting USD downside even if oil prices retreat. At the same time, weakness across global bond markets continues to support demand for a liquid defensive currency.”

Overall Euro sentiment remains fragile with fears over French debt and energy-sector pressures.

SocGen did add; “However, with so much bad news already priced in we think downside is limited from here.”

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TAGS: Euro Dollar Forecasts