The Currency analytics
By Julie Binoche
UBS thinks the euro will stay pretty stable against the dollar. The bank's analysts want the currency pair hanging around 1.20 for most of 2026.
Recent trading shows the euro at roughly 1.1950, which isn't bad considering all the wild economic data coming from both sides of the Atlantic.
Jerome Powell and his team at the Federal Reserve are taking things slow, keeping rates where they are while they watch economic conditions.
Last week's U.S. inflation numbers caught everyone off guard - the increase came in slower than expected, and currency markets went nuts.
The euro's got other stuff to worry about too.
Geopolitical tensions between major economies can mess with investor confidence big time, leading to sudden currency swings that catch traders sleeping.
Currency strategists are keeping close tabs on potential ECB interventions. Any policy shifts could completely change market dynamics and send the euro in a different direction…
Forex markets might get busier as 2026 rolls on. Traders and analysts are ready to jump on any new data or policy announcements that come their way.
The relationship between fiscal policies and economic recovery efforts will be crucial going forward.
For now, forex traders are watching policy developments like hawks. Related coverage: Fed Backs Digital Banking Push as.
UBS stays cautious about external economic shocks that could mess up the current EUR/USD balance.
European Union economic forecasts coming in March should give more insight into the region's economic health.
UBS also wants traders watching upcoming speeches from ECB officials like Chief Economist Philip Lane, who might drop hints about the central bank's stance on inflation and growth.
Chinese trade balance figures in mid-March could affect global risk sentiment and impact the EUR/USD pair.