Euro Dollar Exchange Rate Outlook

UBS maintains a range-bound outlook for EURUSD (1.15-1.20) with an upside bias to 1.20 by end-2026 as Middle East tensions ease and energy prices normalize.

Key Takeaways

• 1.EURUSD is expected to remain range-bound between 1.15 and 1.20 in the short term, with an upside bias as the Middle East conflict concludes.
• 2.Oil prices are a critical driver; sustained high prices support USD safe-haven demand, while normalization favors the Euro.
• 3.Monetary policy divergence is shifting, with UBS expecting ECB hikes in June/July 2026 and Fed cuts starting in 4Q26.

Table of Contents

• EURUSD: Range-bound, with upside bias
• Range-trading with an upside bias once the conflict is over
• Investment considerations
• CIO Forecast- EURUSD
• Appendix

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