Published research this week leans bearish on the euro into year-end, with a recovery not expected until 2028.
The core argument across analysts is policy divergence. One camp sees the European Central Bank's tightening cycle as much shorter than the Fed's, with a hawkish Fed dominating into year-end. Others point to below-consensus eurozone growth and uncertainty around the 2027 French presidential election as added headwinds. Lower energy prices and the chance of less Fed tightening than markets expect offer some cushion, but researchers argue not enough to flip the story.
Near term, the consensus view puts EUR/USD at the lower end of a 1.10–1.15 range, with a tail scenario — strong US jobs and an oil rebound pushing the Fed toward a bigger hike — pulling it below 1.10. For 2027, published forecasts cluster around 1.10 to 1.12, described as a weak euro without clear trend. A "Frexit" scare toward parity is flagged as a downside risk, not a base case.
By late 2028, one strand of research sees a recovery to around 1.18 as growth and yield gaps narrow.
By the numbers:
• Positioning (CFTC, as of 3 Nov 2026): Euro: speculators (leveraged funds) are net short, 9.0% of open interest. That is the largest net short in a year: crowded short (COT index 0 of 100). The net position fell by 6,985 contracts on the week.