Euro-to-Dollar: Investment Bank Forecasts Upgraded
- Written by: Gary Howes
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Pound Sterling Live’s latest survey of more than 30 of the world’s biggest investment banks shows analysts have upgraded their expectations for the Euro at the mid-year point compared to the outlook just three months ago.
The survey shows the median and mean forecasts, which provide a consensus estimate for the Euro to Dollar exchange rate, have risen across all time horizons.
We consider the median and mean forecast points to be the most accurate and credible forecasts available as they harness the wisdom of crowds. It allows those with payments to make credible and rational judgements when considering timing decisions.
The results of the survey are presented in our latest consensus forecast PDF, available on request.
The survey also creates a variance band by presenting the highest and lowest forecasts in the dataset. Crucially, it identifies the investment banks that were most accurate in predicting where EUR/USD would be in three months.
The most accurate 3-month-ahead forecaster in March’s survey was NAB, which also scored the top spot in both the GBP/USD and GBP/EUR polls.
The mid-year update shows investment banks have made upward revisions for the Euro across all time horizons.
This upgrade in expectations could influence timing decisions for individuals or businesses planning EUR or USD purchases, as the consensus now points to a stronger Euro profile through to mid-2025.
A €100,000 EUR/USD transfer would have delivered several thousand dollars more under the June forecast conditions compared to the March forecast for the 3-month horizon, based on the mean.
To be sure, the survey does not point to runaway Euro strength, but it does suggest the Dollar’s resilience of earlier in the year has faded. In March, the trajectory suggested a relatively contained Euro profile; by June, expectations had shifted higher, with fresh multi-month highs forecast within the next year.
Reasons for the shift are covered in detail on the pages of Pound Sterling Live and include signs of economic resilience in the Eurozone, a softer U.S. interest rate outlook, and reduced downside risks for the single currency.
As always, what comes next is uncertain, but consensus forecasts can provide a valuable anchor amidst the cross currents of international FX.
Request your download of the consensus forecast document here.
