Citi predicts that the exchange rate of the US dollar to the euro will rise to 1 euro to 1.10 US dollars in 2026, as it is expected that the US dollar will benefit from the renewed acceleration of the US economy and that the Fed will cut interest rates less than market expectations. Citi expects EUR/USD to drop to a minimum of 1.10 in the third quarter of 2026, down nearly 6% from the current level of 1.1650. A team of foreign exchange strategists led by Daniel Tobon wrote in the report, “Our constructive expectations for the US dollar in 2026 are mainly due to expectations for a recovery in US economic growth, especially as the November midterm elections approach. Economic growth is not driven by a single dominant factor, but a combination of factors may bring more positive prospects, which will make it difficult for the market to further dovish pricing the Fed's interest rate cuts.”

Citi predicts that the exchange rate of the US dollar to the euro will rise to 1 euro to 1.10 US dollars in 2026, as it is expected that the US dollar will benefit from the renewed acceleration of the US economy and that the Fed will cut interest rates less than market expectations. Citi expects EUR/USD to drop to a minimum of 1.10 in the third quarter of 2026, down nearly 6% from the current level of 1.1650. A team of foreign exchange strategists led by Daniel Tobon wrote in the report, “Our constructive expectations for the US dollar in 2026 are mainly due to expectations for a recovery in US economic growth, especially as the November midterm elections approach. Economic growth is not driven by a single dominant factor, but a combination of factors may bring more positive prospects, which will make it difficult for the market to further dovish pricing the Fed's interest rate cuts.”