It just occurred to me that the discussions around the USD EUR forecast are getting more and more intense. That also makes sense when you look at how much is going on in the foreign exchange market right now.

What’s interesting: The USD-to-EUR exchange rate is influenced by so many factors at the same time that a simple USD EUR forecast is actually hardly possible. But let’s take a look at what the main drivers are.

Central banks naturally play a major role. The ECB has practically achieved its goals, while the Fed in the US is still battling higher inflation rates. In May 2026, it’s clearly evident: the eurozone has brought inflation down to about 2.1% in October 2025 and is therefore very close to the target rate. The US, by contrast, is still around 3%, i.e., above the desired level. That’s actually a classic signal for the euro to appreciate.

What surprised me personally was the balance of payments situation. The US is running a deficit of about 250 billion dollars in the second quarter of 2025 (which corresponds to around 3.3% of GDP), while the EU recorded a surplus of about 81 billion euros. From a purely economic-theoretical perspective, that clearly favors the euro.

But there are also counterarguments. The US is currently rolling out a massive investment program supported by tax cuts, which could strengthen the dollar in the short term. Germany has also put together a large spending package, but its effectiveness is hard to gauge—this is actually the big black box for 2026.

For the USD EUR forecast for the coming year: Market consensus points more toward further euro appreciation. The EU Commission expects GDP growth of 1.2% in 2026, supported by higher exports and steadier investment. The interest-rate gap between the Fed and the ECB will likely keep widening if the US carries out rate cuts and the ECB holds its rate.

Geopolitically, quite a lot is still in flux. The trade agreement between the US and the EU, with base tariffs of 15% (higher for steel and aluminum), could affect the dynamics—but whether that will weaken or strengthen the euro in the long run is hard to say.

Conclusion: The USD EUR forecast remains exciting for 2026. Everything points to euro strength, but the uncertainty surrounding the economic programs and their actual impact makes a secure prediction impossible. I’m watching this very closely—anyone who wants to understand the foreign exchange market should keep these factors in mind.