The euro could stay locked between $1.13 and $1.20 against the dollar for the rest of 2026, the narrowest range on record, according to Deutsche Bank strategist George Saravelos. He points to competing forces: a dollar propped up by energy prices and rate expectations, against resilient European growth and capital inflows.
Deutsche Bank's George Saravelos says the euro could trade between $1.13 and $1.20 for the rest of 2026, which would mark the narrowest range on record. The dollar draws support from high energy prices and expectations of a further interest rate rise in the US.
However, Saravelos says those rate expectations could be priced lower, since they currently sit above the level the Federal Reserve has signaled. The US has also grown reliant on stock market inflows to finance its current account deficit, which leaves the dollar exposed if an AI-driven fall in equities were to hit.
In Europe, capital inflows remain robust and growth has proved resilient, Saravelos says. That said, the energy shock has weighed on Europe's terms of trade.
The euro trades steady at $1.1482, holding within the band Saravelos describes.
Source: The Wall Street Journal
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