Nordea strategists note EUR/USD has already hit its H1 2027 target of 1.12 and now expect further US Dollar (USD) strength versus the Euro (EUR). Nordea lower its year-end EUR/USD forecast to 1.10 and projects a test of 1.08 in H1 2027 before a recovery to 1.14 in H2 2027 and 1.20 by end-2028, citing rate differentials, AI-related inflows and European political risks.

Forecast cut as USD stays supported

"Overall, we remain constructive on the USD relative to the EUR over the next six to nine months."

"EUR/USD reached our H1 2027 target of 1.12 faster than expected."

"We therefore lower our year-end EUR/USD forecast to 1.10 from 1.14."

"We expect EUR/USD to test 1.08 in H1 2027 before recovering to 1.14 in H2 2027 and 1.20 by end-2028."

"Our baseline remains a strong US economy and two further Fed hikes, with risks skewed to the upside."

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