Wall Street banks are capitulating on bets for a stronger euro, with major firms including JPMorgan Chase, Morgan Stanley and Bank of New York Mellon now forecasting the common currency could slide over 3% to $1.10 in the next year. The euro has already slumped this month to a one-year low as traders price in a Federal Reserve rate hike in 2026 while no longer fully pricing one from the European Central Bank. JPMorgan slashed its mid-2027 target to $1.10, Royal Bank of Canada sees that level by the end of next year, and Bank of America and Wells Fargo have also cut their calls. One-year risk reversals are the most bearish on the euro since March 2025, reflecting growing negative sentiment. The shift follows Fed Chairman Kevin Warsh signaling the central bank will not tolerate high inflation, while ECB President Christine Lagarde indicated no need for more forceful action after a single hike this month.
Bank of America Corp
Societe Generale S.A.
Morgan Stanley
Royal Bank of Canada
Wells Fargo & Company
JPMorgan Chase & Co