📝Now See EUR/USD Climbing to 1.12 On 12-Month View: Rabobank

The likelihood that Germany’s incoming coalition will be able to muster support in parliament to change the country’s constitution and enable a loosening of the debt brake came a little closer today with the news that the CDU/CSU, SPD and Greens have reached an agreement on spending. A final vote in the Bundestag is scheduled for March 18. There could still be hurdles and potential delays before the impact of the planned increase in fiscal spending impacts the real economy in Germany and through the rest of the region. This also points to the risk of pullback in EUR/USD. That said, economists have already started to raise their growth outlooks. This week, German’s IfW economic institute raised its 2026 growth estimate for Germany to 1.5% from a December forecast of 0.9%. Although Germany and Europe face various other challenges and structural issues, we now see EUR/USD climbing back to 1.12 on a 12-month view. - Rabobank