FX Outlook 2027: A weak euro in 2027
EUR/USD
We expect EUR/USD to remain weak in 2027 as stronger US growth and French political uncertainty weigh on the euro.
We expect a recovery in 2028 as energy prices fall and growth and yield differences narrow.
Japanese yen
We expect the yen to strengthen gradually as interest rate gaps narrow and energy prices fall in 2027–2028.
Fiscal risks and investors’ unwinding positions could cause temporary weakness, despite the yen’s significant undervaluation.
Sterling
We expect sterling to remain strong against the euro until mid-2027, supported by resilient UK growth and French political uncertainty.
Some gains should reverse as eurozone uncertainty eases, energy prices fall and markets scale back expectations for UK rate increases.
Swiss Franc
French political uncertainty should support the franc against the euro in the first half of 2027.
Wider interest rate gaps and possible SNB intervention should limit further gains.
Norwegian krone and Swedish krona
We expect NOK to weaken in 2027–2028 as energy prices fall and its interest rate advantage narrows.
SEK’s strong fundamentals and undervaluation provide support, but interest rate differences and global growth risks limit near-term gains.
Dollar bloc
Higher rates and easing trade tensions should support the Canadian dollar, but falling energy prices will weigh on the currency.
We expect Australian dollar weakness in 2027, as interest rate support fades and energy prices fall.
Lower energy costs offer support to the New Zealand dollar, but fewer-than-expected rate increases and cautious investors pose risks.
Chinese yuan, Brazilian real, Polish zloty
We expect the Chinese yuan to strengthen on trade surpluses and wider international use.
The Brazilian real could recover as attractive real interest rates and political stabilisation provide support.
The Polish zloty faces continued pressure from political uncertainty, central bank independence concerns and a large fiscal deficit.