Rabobank Euro to Dollar Forecast: EUR/USD to See 1.14 Before Recovery to 1.16
AI Market Analysis
EUR/USD: mixed, with near-term pressure and a conditional medium-term recovery case. Rabobank’s cut to its one-month forecast reflects a stronger dollar backdrop: markets are pricing a high chance of another Fed hike, while the Iran conflict’s energy risks may weigh on euro-area confidence and limit demand for the euro. That combination could keep EUR/USD gains constrained, especially if US data or Fed communication sustains expectations of tighter policy.
The three-month call at 1.16 is not a firm bullish catalyst; it depends on the market having priced in more Fed tightening than the Fed ultimately delivers. If expected US rate support fades, the dollar could give back ground and EUR/USD recover. Conversely, persistent energy disruption, stronger US data, or further hawkish Fed repricing could undermine that scenario. The article reported spot near 1.1377, so its 1.14 one-month forecast is only modestly above that level—not, by itself, a forecast of a substantial drop.
What to monitor:
Fed-hike expectations and US data, developments affecting energy supply and prices, and euro-area growth indicators. Rabobank also flags France’s 2027 presidential election as a potential longer-term constraint on the euro.