Bank of America: The euro is likely to appreciate further as a result of fiscal reforms in Germany and the European Union

On March 10, Bank of America analysts said in a report that the recent appreciation of the euro will be further advanced, supported by ambitious fiscal reforms in Germany and the European Union. Germany plans to ease its fiscal rules to increase defense and infrastructure spending, while the European Union is also increasing defense spending. "The euro has appreciated, but we don't think it's reacting enough," analysts said. They said that the current demand for the euro looks muted given the "game-changing" fiscal reforms. EURUSD remains well below its all-time average of 1.19. Bank of America recently raised its forecast for EUR/USD from 1.10 to 1.15 by the end of 2025 and from 1.15 to 1.20 at the end of 2026.