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Euro (EUR) Forecasts for 2019

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Forecasts for the euro change all the time, affected by news events and relative sentiment towards the overall Eurozone economy. This continually updated article reviews EUR bank forecasts and popular cross-rate trends.

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Euro forecast

EUR in the markets

Euro sentiment dipped in mid-June after the ECB, like other major central banks of the world, ramped up its dovish rhetoric. It said that there was “considerable room” for further quantitative easing and that it would consider negative interest rates. Ordinarily, this would spark an extended euro decline but since other major currencies are also wrestling with easier central bank policies, euro depreciation may be contained.

In spite of Brexit, a slowdown in economic growth, Italian risks and persistently weak inflation — an important measure of inflation expectations fell in June to a record low — the euro did fantastically well against the Australian dollar, New Zealand dollar and British pound between mid-April and mid-June. Due to a stronger US dollar, EUR/USD was down 2 percent on the year at $1.12, close to long-term lows.

EUR/USD – 6 month chart

EUR forecasts

In May, Deutsche Bank predicted more euro depreciation. It said EUR/USD could break $1.10 over the summer, with key drivers being the US-China trade war, Brexit and Italian risks. Per a recent Reuters poll of analysts, EUR/USD will be at $1.17 in mid-2020.

Also in May, Lloyds revised its year-end EUR/GBP forecast to £0.85, though that could be much higher if Theresa May is replaced as UK PM by a hardline Brexiteer.

On Brexit, Nordea Research has said that “no deal” will have the euro buying £0.95, that a Norway-type Brexit (“Norway plus”) or permanent customs union will lead to £0.81-0.83, and a deal akin to the current withdrawal agreement should see £0.83-0.84.

EUR/AUD could be a lot higher by year-end, at rates between A$1.67 and A$1.785, based on implied forecasts from Danske Bank and Westpac.

You can also read our full Foreign Exchange Guide to the Eurozone.

EUR/USD – Historical Rates

PeriodChange*EUR/USDDate
1 Day-0.2%1.104519 Sep 2019
7 Day-1%1.113013 Sep 2019
30 Day-0.6%1.109121 Aug 2019
3 Month-3.2%1.138722 Jun 2019
1 Year-6.4%1.177720 Sep 2018
5 Year-14.1%1.283521 Sep 2014
10 Year-25.5%1.479322 Sep 2009

*For period to 20-Sep 21UTC when EUR/USD was 1.1020

 

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