The Currency analytics
By Julie Binoche
Morgan Stanley thinks EUR/USD will climb to 1.23 in Q2 2026. The bank's currency team points to several economic shifts that could push the euro higher against the dollar over…
Eurozone inflation keeps running hot above ECB targets, and that's got traders watching every data release pretty closely.
U.S. manufacturing output has been weaker than expected, and the labor market isn't as tight as it was six months ago.
Energy prices are another wild card that's working in the euro's favor right now. Brent crude has stayed above $90 per barrel through January 2026, which keeps inflationary…
Trade data from the U.S. isn't helping the dollar either.
The Commerce Department reported on January 25 that the trade deficit widened again, which typically weighs on currency values.
European investor sentiment has shifted too. Recent surveys show growing optimism about the continent's economic outlook, which could bring more capital flows into eurozone assets.
Geopolitical factors remain murky. Trade talks and shifting global alliances could impact currency values, but Morgan Stanley didn't get specific about which developments they're…
The ECB's balance sheet moves are getting attention from traders. The central bank has been slowly winding down its asset purchase program since late 2025, which tightens…
Fed Chair Jerome Powell has his own March meeting coming up that could shake things up. He's been talking about monitoring inflation and jobs data closely, so any shift in Fed…
Corporate earnings from big eurozone companies have been beating expectations lately. Strong results from European firms boost confidence in the region's equity markets, which…
Currency volatility has been wild recently. Unexpected global events keep hitting markets, making short-term calls pretty tough.
The bank updates these forecasts regularly as new data comes in. Foster said they're staying flexible since financial markets can shift fast when policies change or surprise data…
Neither the ECB nor the Fed commented on Morgan Stanley's projections when contacted. That's pretty normal - central banks don't usually respond to private forecasts from…
Fiscal policy differences between regions could matter too. If the U.S. government increases spending significantly, that might weaken the dollar through higher borrowing.