UK analysts forecast the Euro-Dollar rate to stay near 1.16 over one to three months, arguing that France’s fiscal risks complicate the case against the Dollar.
The US Dollar held Thursday’s gains against the Euro as Rabobank argued that concerns over American debt overlook the fiscal problems facing alternative investments.
At the time of writing, EUR/USD was trading around 1.1610, little changed after falling 0.21% on Thursday.
That leaves the pair close to Rabobank’s forecast of approximately 1.16 over the next one to three months.
“It is RaboResearch’s view that dollar debasement fears are overdone.”
Buybacks cannot settle the fiscal debate
Rabobank’s assessment followed Wednesday’s announcement of plans to buy back up to $6 billion of longer-dated Treasuries, which failed to contain yields as rising oil prices intensified inflation concerns.
The bond sell-off continued on Thursday despite the enlarged buyback operation.
The Treasury’s stated purpose for liquidity-support buybacks is to give investors regular opportunities to sell older securities.
Rabobank questions how much intervention can achieve without an improvement in the underlying outlook.
“Broadly speaking, investors tend to be doubtful as to the lasting impact of any kind of official intervention (FX included) in the absence of clear evidence that fundamentals are pushing in the same direction.”
The credibility concerns also feature in UniCredit’s warning that conflicting Treasury and Fed objectives could weaken the Dollar.
Rabobank gives greater weight to the risks elsewhere.
France complicates the Euro alternative
The bank expects difficult French budget negotiations ahead of the 2027 presidential election, with political divisions increasing the risk of gridlock.
Previous disputes caused limited lasting damage to the Euro because investors selling French government bonds could switch into German or Italian debt.
Rabobank economists warn that broader political concerns could eventually weaken that protection and encourage investors to retain US assets.
In our house view, we believe this distinction matters: higher Treasury yields can signal fiscal unease without automatically producing a sustained Dollar decline.
The Euro received additional rate support from Thursday’s ECB decision to raise its deposit rate to 2.50%, effective from 16 September.
However, policymakers left subsequent decisions open despite raising their 2027 inflation forecast to 2.5%.
The hike therefore adds a counterweight to Rabobank’s argument, but has yet to move the EUR/USD exchange rate meaningfully away from 1.16.
The forecast would face a tougher test if US fiscal concerns prompted investors to sell US Dollar assets while confidence in European debt remained intact.
US Dollar Prices: This Week
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | +0.15% | +0.09% | -1.03% | +0.36% | +0.41% | +0.90% | +0.64% | |
| EUR | -0.15% | -0.06% | -1.18% | +0.21% | +0.26% | +0.75% | +0.49% | |
| GBP | -0.09% | +0.06% | -1.12% | +0.28% | +0.32% | +0.82% | +0.55% | |
| JPY | +1.04% | +1.19% | +1.13% | +1.41% | +1.46% | +1.95% | +1.69% | |
| CAD | -0.36% | -0.21% | -0.27% | -1.39% | +0.05% | +0.54% | +0.28% | |
| AUD | -0.41% | -0.26% | -0.32% | -1.43% | -0.05% | +0.49% | +0.23% | |
| NZD | -0.90% | -0.75% | -0.81% | -1.92% | -0.54% | -0.49% | -0.26% | |
| CHF | -0.64% | -0.49% | -0.55% | -1.66% | -0.28% | -0.23% | +0.26% |
The FX heat map compares how US Dollar (USD) has performed against a basket of major currencies over the past week. The largest move was against the Japanese Yen, where US Dollar recorded its sharpest decline. Data comparing prices today (11/09/2026 06:09 UTC) and daily close on 04/09/2026.
To read the table, choose the base currency from the left-hand column and then move across to the quote currency along the top row. For example, the GBP row and USD column shows the weekly percentage move in GBP/USD.
Our currency coverage draws on live market data, official economic releases and published bank research.
