Interesting how much movement is currently in the dollar-euro ratio. Anyone who has been following the past few months knows: this is not just a currency question, but a reflection of the entire economic policy situation on both sides of the Atlantic.

Looking at the dollar exchange rate forecast for 2026, it quickly becomes clear that central banks are steering the game here. The ECB has long since completed its interest rate hikes, while in the US, further cuts are more likely—at least if the Trump administration enforces its will. This theoretically favors an appreciation of the euro. But it’s more complicated.

Inflation tells a different story. In October 2025, the Eurozone was at 2.1%, very close to the target, while the US was still hovering around 3%. For 2026, the EU Commission expects a euro area with 1.2% GDP growth—not exactly impressive, but stable. The question is: is that enough to weaken the dollar?

This is where geopolitics becomes interesting. After tariff threats in April 2025, the US and EU agreed on a trade deal with base tariffs of 15%. This reduces uncertainty, but the Trump agenda remains aggressive—massive investments, tax cuts, expansive fiscal policy. Germany also rolled out its large spending package, albeit with significantly lower inflation. 2026 will show who makes better use of these programs.

The balance of payments actually favors the euro: the US has a deficit of about 250 billion dollars (3.3% of GDP), while the EU has a surplus of around 81 billion euros (1.7% of GDP). Traditionally, this would lead to an euro appreciation. But classical theory and reality often diverge in the foreign exchange market.

The market consensus currently tends to see the euro continuing to rise. However, there is a major uncertainty factor: how will the economic stimulus programs really impact the economy? The German package is difficult to predict from an economic perspective—the conditions remain tense, and no one knows exactly whether it will produce the hoped-for effects.

For the dollar-euro forecast for 2026, this means in plain language: interest rate differences favor the euro, but economic growth and economic stimulus programs could support the dollar. The coming months will be crucial to see how the real economy develops.