Published research this week leans heavily bearish on the euro against the dollar in the near term, with most analysts expecting EUR/USD to drift toward or below the lower end of the 1.14–1.18 range.
The common thread across recent research notes is a hawkish repricing of the Fed, with rate-cut expectations now pushed out as far as 2027. That has widened the yield gap in the dollar's favor. One camp of analysts also flags a flattening US yield curve, higher projected energy prices, and European investors being under-hedged on dollar exposure as added pressure on the euro. Another thread argues that without a resolution to Middle East tensions, risk premia stay elevated and the dollar keeps its edge — and that the euro lacks a clear near-term catalyst unless the ECB signals another hike.
A contrarian view holds that ECB commitment to further tightening, alongside upgraded inflation projections, should actually support the euro over the next two quarters. A separate strategic call sees EUR/USD recovering toward 1.16–1.17, but only if Fed cuts arrive in 2025.