J.P. Morgan
Global FX Strategy 2026
LIVE25 November 2025USD bearish
Back to CurrenciesModerately Bullish
EUR/USD
Lofty ambitions, constrained flight
JPM Forecast Path
vs Prior ForecastCurrent target: 1.2Prior target: 1.22Revision: -1.6%
Cross-Firm Forecast Comparison
Key Drivers
Fed terminal rate
Relative growth momentum (FRI)
Real yield differentials
Terms of trade
German fiscal delivery
All Firm Targets (Dec '26)
GSBullish1.2500
DBStrongly Bullish1.2500
MUFGBullish1.2400
INGBullish1.2200
BofABullish1.2200
BARCModerately Bullish1.2100
JPMModerately Bullish1.2000
MSBullish (H1), Fading (H2)1.1600
Key Issues for 2026
1.EUR/USD positive convexity to Fed pricing in 1H
2.EUR/USD usually strengthens in synchronized growth cycles
3.EUR not a good funder despite low yield
4.FX hedging no longer an urgency
5.Relative productivity still a challenge vs US
Risk Scenarios
Very bullish1.25+
US growth momentum slides or Fed independence at risk
Slightly bullish1.19-1.21
Fed delivers insurance cuts without hawkish repricing; positive EU growth momentum
Less bearish~1.13
Fed pauses insurance cuts at 4%
Most bearish~1.10
Regional growth lost + additional ECB cuts while Fed resilient
Analysis Summary
Moderately bullish on Eurozone growth and German fiscal expansion. Gains to be limited vs. 2025 unless US data materially weakens. High-side targets revised to 1.20 (from 1.22) on US resilience with periods of consolidation expected.