SocGen Research sees a a scope for EUR/USD to extend gains through 1.20 over the coming few weeks.

 

"For most of last year, and the start of 2026, EUR/USD rallied more/faster than relative rates suggested it should, in response to the belief that if President Trump wanted a weaker dollar, he could probably succeed in getting one. Now however, EUR/USD is lagging the rates market. That makes sense – the US economy is expected to grow a good bit faster than the Eurozone this year, is less vulnerable to the oil price shock and still has some safe haven status, even if the number of articles about de-dollarisation and the end of the dollar’s hegemony grows daily," SocGen notes.

 

"Today’s rally towards 1.18 reverses the entire fall since the start of the US and Israeli war with Iran. It has its roots in optimism that a deal to re-open the Strait of Hormuz can be found and oil prices (and supply) will return to more normal levels soon. There is a very good chance now, that if we do indeed see a fresh de-escalation of the conflict (and in particular, reopening of the Strait of Hormuz), EUR/USD will breeze back above 1.20 on a wave of positive sentiment," SocGen adds.