BlockBeats News, June 29th, multiple Wall Street banks have successively lowered their euro to dollar outlook. JPMorgan Chase, Morgan Stanley, and BNY Mellon all project that the euro will fall over 3% to around 1.10 in the next year. The euro has already dropped to a one-year low this month, presenting a stark contrast to its five-year high above 1.20 at the beginning of the year.

Policy divergence is a key driving factor. The new Fed Chair Powell has signaled a tough anti-inflation stance, leading the market to re-bet on an interest rate hike later this year; ECB President Lagarde, on the other hand, has stated that there is no need for aggressive policy response to the Middle East conflict, opting for a relatively mild approach. The Iran war has pushed up oil prices, strengthened the demand for the dollar, further weakening euro support. Options market signals have similarly turned bearish, with the one-year risk reversal indicator dropping to its most bearish level since March 2025.

Societe Generale's Chief FX Strategist bluntly stated that "the euro's uptrend has basically come to an end" and likened the current energy shock to the severe blow the European economy suffered after the Russia-Ukraine conflict in 2022. While Bank of America has revised its year-end forecast from 1.20 to 1.15, it still maintains a "neutral" outlook, being one of the few relatively moderate voices.