In its latest report, Danske Bank has published new forecasts for the exchange rates of the Euro, Dollar, and Pound, indicating a potential strengthening of the Dollar in the coming months and challenges facing European currencies.
Euro vs. Dollar Analysis (EUR/USD)
According to reports published on July 17, 2026, Danske Bank predicts that the EUR/USD currency pair will face downward pressure over a 6 to 12-month horizon. The bank's analysts believe that the resilience of the United States economy compared to the relative stagnation in the Eurozone is the primary driver of this trend [1]. Based on this forecast, the 12-month target for EUR/USD is set at 1.05, indicating a depreciation of the Euro relative to current levels.
British Pound Status and Monetary Policies
In another part of this analysis, reflected by media outlets such as Gazete Pencere, the status of the British Pound (GBP) was also examined [2]. Danske Bank notes that if the Bank of England (BoE) moves to cut interest rates faster than the US Federal Reserve, the Pound may weaken against the Dollar. However, relative stability in UK inflation data could moderate this trend, but overall, the bank's view on the Pound remains cautious in the medium term.
Factors Influencing Currency Markets in the Second Half of 2026
Divergence in the monetary policies of the world's major central banks is the main driver of currency volatility in July 2026 [3]. While the Federal Reserve emphasizes maintaining interest rates to control persistent inflation, the European Central Bank (ECB) is struggling with weak economic growth. This economic divergence has led investors to lean toward the US Dollar as a safe-haven asset with higher yields.
Danske Bank's Strategic Outlook on the Market Future
Danske Bank emphasizes that geopolitical risks and potential elections in some key countries could affect these forecasts [1]. However, current economic models show that the US Dollar will continue to have the upper hand against European currencies due to a stronger trade balance and capital flows toward US financial markets. Forex traders should closely follow employment and inflation data in the coming months to confirm this trajectory [3].
Danske Bank released its new forecasts for major currency pairs for the second half of 2026.
linkSources
- Danske Bank FX Strategy: EUR/USD to move lower in 12 months — Danske Bank Research (2026-07-15)
- Danske Bank'tan Euro, dolar ve sterlin tahmini — Gazete Pencere (2026-07-16)
- Global Currency Outlook: Central Bank Divergence in H2 2026 — Reuters (2026-07-17)
