Currency outlook
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Exchange rate forecasts — Our View on currencies
Find out what we expect to see for EUR/CHF, EUR/USD, USD/CHF, GBP/USD and EUR/SEK over the next three to six months – and which economic, monetary policy and geopolitical factors are currently influencing exchange rates.
The current assessment
October and November 2026
On 3 November, US citizens will use the midterm elections to express their satisfaction with the work of the federal government. All 435 members of the House of Representatives will be re-elected, and 35 of the 100 Senate seats are also up for grabs. Voters often use their midterm vote to send a message to the incumbent president.
According to polls, Americans are currently particularly dissatisfied with the US President’s economic policy. Donald Trump promised lower prices, but the opposite has happened: the cost of living is higher now than two years ago, most recently due to higher energy costs.
Polls suggest that the Republicans, under Trump’s leadership, are set to lose their majority in the House of Representatives to the Democrats. The Senate elections, on the other hand, remain wide open.
Both parties are roughly neck and neck. However, even a loss of the Senate majority by the Republicans cannot be ruled out.
In the run-up to US midterm elections, the dollar has, on average, depreciated since the 1970s. However, this is merely an average observation. No clear trend can be deduced from this when looking at individual election years.
The reaction of the foreign-exchange markets to this year’s election is likely to depend not only on the result, but also on Trump’s reaction. If the President were to cast doubt on the legitimacy of the vote, as he did following the 2020 presidential election, this could lead to uncertainty. In that case, the dollar would probably follow the average trend and depreciate. Thomas Gitzel, Chief Economist
Aktuelle Wechselkursprognosen im Überblick
| Currency pair | Expected range | Period | Assessment |
|---|---|---|---|
| EUR/USD | 1.12–1.18 | 3–6 months | Sideways |
| EUR/CHF | 0.93–0.96 | 3–6 months | Euro with slight upside potential |
| USD/CHF | 0.79–0.86 | 3–6 months | Dollar tends to be supported |
| GBP/USD | 1.28–1.36 | 3–6 months | Sideways |
| EUR/SEK | 10.80–11.50 | 3–6 months | Potential for the krona to appreciate |
EUR/USD Forecast: Sideways movement remains likely
Higher US interest rates and the robust US economy are supporting the US dollar. At the same time, its high valuation and the current account deficit are limiting further upside potential. The US mid-term elections could cause additional volatility, but a sustained breakout from the sideways trend is not currently expected.
EUR/CHF Forecast: Euro with a slight upward trend
Positive economic data from the eurozone and higher key short-term interest rates from the European Central Bank are currently supporting the euro. At the same time, the Swiss central bank is keeping interest rates low. However, the Swiss franc remains an important safe haven and could see stronger demand again should geopolitical risks increase.
USD/CHF Forecast: Higher US interest rates support the dollar
The US central bank’s latest interest rate rise bolstered its credibility and gave the dollar a boost. At the same time, the SNB is maintaining a comparatively loose monetary policy. This suggests further upside potential for USD/CHF, whilst the high US trade deficit limits the dollar’s longer-term prospects.
GBP/USD Forecast: The pound is likely to trend sideways
The political transition in the UK has recently provided support for the pound. However, high public deficits, persistent inflationary pressures and weak growth are limiting its potential for appreciation. VP Bank therefore continues to expect GBP/USD to move predominantly sideways.
EUR/SEK Forecast: Swedish krona has potential to appreciate
The Swedish krona is particularly sensitive to geopolitical uncertainty. At the same time, sound public finances, a robust domestic economy and fundamental valuation factors favour the Swedish currency. VP Bank therefore continues to expect the krona to have potential to appreciate against the euro.
The reaction of the foreign-exchange markets to this year’s election is likely to depend not only on the result, but also on Trump’s reaction
Dr Thomas Gitzel Chief Economist
What influences exchange rates?
Exchange rates are determined by the interplay of numerous economic and political factors. Of particular importance are:
- Interest rates and central banks: Higher interest rates can make a currency more attractive because investments in that currency promise higher corporate earnings.
- Inflation: Differences in price trends affect purchasing power in the long term and, consequently, the exchange rate between two currencies.
- Economic growth: Strong economic growth can bolster a currency, whilst weak growth prospects can have a negative impact.
- Geopolitics and market sentiment: In times of uncertainty, demand often rises for currencies considered safe havens – such as the Swiss franc or the US dollar.
- Public finances and trade balance: High deficits or rising indebtedness can undermine confidence in a currency.
- Market expectations: Foreign exchange markets react not only to actual decisions, but often in advance to anticipated changes in interest rates, inflation or economic policy.
FAQ
An exchange rate forecast is an assessment of how the relationship between two currencies might develop in the future. Factors taken into account include interest rates, inflation, economic growth, political developments and the valuation of the respective currencies. Forecasts highlight possible developments but do not guarantee a specific future exchange rate.
VP Bank’s latest currency analysis covers the currency pairs EUR/USD, EUR/CHF, USD/CHF, GBP/USD and EUR/SEK. This covers key exchange rates between the euro, the Swiss franc, the US dollar, the British pound and the Swedish krona.
The expected range describes the band within which VP Bank believes a currency pair could fluctuate over the next three to six months. It does not represent a specific price target, but takes into account the fact that exchange rates can fluctuate over a given period.
Purchasing Power Parity (PPP) describes the principle that a product costs the same in two countries, provided that it can be traded without restrictions and transaction costs are negligible. In the case of the relative PPP used here, which is based on producer price indices, it is assumed that product prices change by the same amount when the exchange rate is taken into account, although price levels may differ.
Exchange rates can react very sharply in the short term to unexpected economic or political events. For this reason, currency forecasts should always be regarded as estimates and scenarios. They are based on the information available at the time of the analysis and may change if, for example, central banks make adjustments to their monetary policy or geopolitical risks increase.
VP Bank publishes its assessments every two months as part of its publication ‘Our View on Currencies’. You can find the relevant publications on the VP Bank Research Portal.
Talk to our experts
Would you like to know how current exchange rate movements might affect your assets or investments? Our experts will be happy to help you make sense of the latest developments.
Talk to our experts
Would you like to know how current exchange rate movements might affect your assets or investments? Our experts will be happy to help you make sense of the latest developments.