RBC Capital Markets strategists anticipate the euro to strengthen to $1.24 within the fourth quarter of 2026 from its present $1.1759. They argue the European Central Financial institution is more likely to preserve charges unchanged for an prolonged interval, which ought to assist the one foreign money.
Markets are nonetheless pricing in some danger of a further ECB minimize, however RBC sees that fading because the eurozone development outlook stays resilient. Against this, the Federal Reserve has resumed fee reductions and signaled extra to come back, making it cheaper for international buyers to hedge towards greenback weak point. On the identical time, capital flows are shifting away from U.S. property towards Europe.
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RBC’s euro outlook highlights concern that extended foreign money energy may ease inflation pressures, limiting the necessity for additional ECB cuts. Whereas this coverage stability helps capital inflows into European property, a stronger euro can also weigh on exporters, leaving equities going through a blended influence.
