EUR/USD: Consensus shifts lower on Dollar resilience – Societe Generale

Kit Juckes at Societe Generale notes that EUR/USD forecasts have been repeatedly revised down as Dollar strength persists. While consensus has moved from 1.20 to 1.16 and Societe Generale now sees 1.15, client discussions suggest markets are even more Dollar-bullish. Strong US data and inflation could push EUR/USD toward new lows in the near term.

Forecasts cut as pair grinds lower

"At the start of this year, consensus forecasts expected EUR/USD to reach 1.20. We projected 1.14. Now, the consensus has moved down to 1.16, while our forecast stands at 1.15 (and I'm regretting the change)."

"The impression we get from client meetings is that the market is, overall, considerably more dollar-bullish than even those forecasts suggest. Elevated oil and other commodity prices, robust US economic data, and a more risk-averse global environment have bludgeoned bearish dollar views."

"Higher inflation and resilient real-economy data could propel the Dollar Index to a near-2026 high (just 0.7% away) or push EUR/USD to a new low (only 0.5% away)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)