Euro views are split — and the split is mostly about timeframes, not facts.
Researchers argue the near-term picture for EUR/USD is bearish. One camp points to a stagflation-style shock from the Iran conflict hitting Europe harder than the US, with weakening eurozone activity surveys denting ECB tightening expectations. The two-year real yield gap has moved against the euro, and some published views see the pair pressing toward 1.15. A related thread highlights deteriorating composite activity data since the Middle East conflict began, a soft growth recovery, and inflation running above 3% and drifting toward 4% — all sapping the euro's relative appeal into year-end.
A contrarian, longer-horizon thread of recent research takes the other side. It rests on euro area growth stabilizing, inflation returning to target, and ECB rates holding near or above neutral while the Fed normalizes lower. On that view, EUR/USD could rise from roughly 1.05 toward 1.20–1.22 by end-2026.
The real disagreement is horizon: today's shock versus a later Fed easing cycle that hasn't arrived yet.