ING has revised its EUR/USD forecast downward to 1.13 for the fourth quarter of 2026 and the first quarter of 2027, citing a persistent risk premium linked to France. According to FX Street, this adjustment reflects concerns that could intensify if French bonds experience further sell-offs.
FX Street also noted that EUR/USD is currently moderately undervalued relative to short-term fundamentals, but the risk premium tied to France may push the pair lower, potentially testing the 1.110 level. This outlook highlights growing market caution around French sovereign debt and its impact on the euro.
For Japanese investors and traders, these developments underscore the importance of monitoring European political and fiscal stability, as shifts in the euro-dollar exchange rate can influence cross-border investment flows and FX market volatility.