Bank of Faixing: The Euro may decline in the second half of 2026.

In a report from Societe Generale, Kit Juckes of France predicts that the Euro to US Dollar exchange rate may decrease in the second half of 2026, as its recent appreciation has outpaced interest rate differentials. He stated that over the past year or so, the Euro's rise has been faster than what the two-year interest rate differential suggests, and this trend is likely to continue into early 2026. This indicates that the market is unwilling to go against President Trump's desire for a weaker US Dollar. He mentioned that while this may encourage foreign investors to hedge against the risk of a weaker dollar, this situation may occur in the first half of the year. He predicts that based on interest rate differentials, the Euro will decline from its current level of 1.1820 US dollars to 1.14 US dollars by the end of the year.