EUR/USD hit new year-to-date lows this week as a French fiscal scare collided with a firmer dollar.
Across the week, analysts tied the slide to a sharp widening in the French-German (OAT-Bund) yield spread, political and budget uncertainty in Paris, and ECB President Lagarde's "measured" tone that dialed back odds of a near-term rate hike. On the other side of the Atlantic, strong US data and a hawkish Fed re-pricing kept the dollar bid.
Several research notes flagged asymmetric downside, with technical and model-based scenarios pointing toward 1.10 — and in more bearish takes, 1.08 or even 1.07 — if spreads keep widening or US payrolls surprise to the upside. One thread also warned that any ECB response via bond-buying tools could itself weigh on the euro.
Not everyone is bearish longer term: a minority of forecasters still see EUR/USD drifting back toward 1.15–1.21 through 2027 on Fed-ECB policy convergence and a Eurozone growth pickup. For now, though, the near-term tape belongs to the dollar bulls.