ING expects the euro to remain within a $1.10 to $1.15 range against the dollar for four to five months as French budget uncertainty and U.S. rate expectations shape the outlook.
Chris Turner, ING’s global head of markets and regional head of research for UK & CEE, said French budget politics could add a risk premium to the euro ahead of the presidential election. ING presents the range as a projection, not a current market price.
The bank’s base case assumes the Federal Reserve stays hawkish in the first quarter of 2027 while U.S. inflation remains above 3%. ING expects shorter-term U.S. rates to decline in the second quarter if inflation moves toward the Fed’s 2% target as energy-related effects fade. Its conditional outlook puts the euro near $1.18 by year-end if U.S. rates and energy costs ease and French political uncertainty recedes.
France’s draft 2027 budget aims to reduce the public deficit to 5% of gross domestic product, from a projected 5.4% in 2026. The Finance Ministry describes the proposed fiscal effort as €54 billion in total, with €43 billion in measures in the draft budget and social-security financing bill. Its summary lists more than €9 billion in state spending restraint and proposes a 30% reduction in the surcharge on large companies. The ministry projects debt-interest costs will rise from €79.2 billion in 2026 to €91.2 billion in 2027, constraining room for other spending.
France’s National Institute of Statistics and Economic Studies (INSEE) reported public debt of €3,595.5 billion, or 119% of GDP, at the end of the second quarter of 2026, up from 117.5% at the end of the first quarter. INSEE has scheduled its next quarterly debt release for Dec. 18, 2026.
The French government has scheduled the presidential election’s first round for April 18, 2027, and the second round for May 2. Turner points to 2017, when results in the Netherlands and France limited euroskeptic parties’ gains as the euro advanced. The current view follows ING’s October EUR/USD assessment, which projected $1.13 at six months and $1.16 at 12 months.
