Deutsche Bank: Euro likely to stay inside 1.13–1.20 range; year-end target 1.17

# Bank stands on the euro now

Deutsche Bank says the euro is more likely to stay inside the year's trading band of roughly 1.13–1.20 against the dollar than to break materially below it. The bank maintains a year-end forecast for EUR/USD of 1.17.

# Bank expects the range to hold

The bank lists several concrete reasons that limit further dollar dominance.

Global growth resilience: Capital expenditure tied to artificial intelligence and efforts on strategic autonomy are sustaining activity. Recent data revisions and central bank moves support that view: the UK's first-half GDP was revised higher because of IT spending, and the Reserve Bank of Australia raised rates again on resilient domestic activity.

China and Europe: China announced additional stimulus measures, and European Purchasing Managers' Index readings are consistent with above-trend GDP growth. Those elements reduce the case for a one-way dollar rally driven purely by U.S. outperformance.

Fixed income positioning: The bank's fixed-income team has adopted U.S. steepener trades and prefers long Japanese government bonds versus U.S. Treasurys. That reflects a view that the bond market may be pricing adjustment in term premia rather than sustained Fed-driven dollar strength.

Energy and geopolitics: Deutsche Bank judges the energy-price shock to be largely priced in, with risks skewed to improvement. Middle East oil flows are normalizing, and the bank sees oil moving toward about $90 per barrel by year-end. It also notes that the political context gives incentives for U.S.-Iran de-escalation ahead of U.S. midterms, which would reduce risk premia in energy markets.

# What this means for traders and policy watchers

EUR/USD: Expect limited room for the euro to fall well below the lower bound of this year's range if the bank's scenario holds. A move toward the 1.17 forecast is Deutsche Bank's baseline by year-end.

# Bottom line

Deutsche Bank's view is that multiple non-U.S. growth drivers, an easing case for additional Fed policy tightening, and improving energy flows combine to keep EUR/USD inside this year's 1.13–1.20 range, with a 1.17 rate as its year-end target.