ING vs Goldman: Euro Forecast Split Widens

ING and Goldman Sachs are at odds over their predictions for the Euro to US Dollar exchange rate (EUR/USD). ING's analysts have raised their interest-rate forecasts but still expect a year-end target of 1.160, whereas Goldman Sachs predicts further losses with targets of 1.14 in three months and 1.12 at six and twelve months.

The Euro to US Dollar exchange rate currently stands near 1.1458, down 0.24% over the past 48 hours. ING's analysts argue that their forecast for sharply cheaper oil in the fourth quarter will favour the Euro, while Goldman Sachs places greater emphasis on the Dollar's economic support.

ING expects both central banks to raise rates in December and then pause for a prolonged period, which it believes represents less tightening than investors anticipate. In contrast, Goldman warns that if the Fed delivers less tightening than markets expect, this could weaken the currency again.