At Société Générale, analysts maintain a positive short-term outlook for the euro and expect a notable appreciation of the pair to around 1.20 in early 2026. However, in the second half of the year, the bank forecasts a reversal in the trend and a decline toward 1.14 by year-end.
SocGen notes that December has historically been a weak month for the US dollar, and this seasonal factor is expected to provide solid near-term support for EUR/USD.
In addition, the bank anticipates further signs of weakness in the US labour market, which would undermine confidence in the dollar in the near term and reinforce expectations of a more dovish monetary policy stance from the Federal Reserve over the course of the year.
However, later in 2026, Société Générale analysts expect an improvement in the US economic growth outlook, which is likely to appear more favourable compared with that of the euro area.
If confidence in the US economy strengthens, markets may price out expectations of further Federal Reserve rate cuts, providing support for the dollar in global markets.
Once these two factors begin to play a decisive role, Société Générale expects the euro to come under pressure and move lower toward its long-term average, which the bank estimates to be around 1.12.