Standard Chartered has adjusted its view on the U.S. dollar, forecasting a weaker trajectory than initially expected.

The multinational bank, known for its strong presence in Asia, now anticipates the EUR/USD pair will climb to 1.16 by the conclusion of the second quarter in 2025. This marks a significant increase from its previous forecast of 1.06. StanChart also expects the euro to maintain that level through the end of next year, revising its prior year-end estimate from 1.04.

This upgraded outlook is based on a broader trend of U.S. dollar softness against other major currencies in the G10 group. The bank also noted a modest “risk-on” sentiment, hinting that higher-beta currencies could outperform traditional safe-haven assets over the coming months.

While Standard Chartered expects the dollar to remain slightly weaker relative to current levels, it still envisions overall stability through the remainder of 2025. Even with the U.S. government’s recent positive moves on trade tariffs and the ongoing strength in stock markets, the dollar has not managed to gain significant ground, reinforcing the bank’s outlook.

According to StanChart, the gradual repositioning in dollar holdings suggests there may still be room for further depreciation in the greenback’s value.

Nevertheless, the bank acknowledged that uncertainties could alter its central forecast. One key political factor is President Trump’s strategy to maintain a stable policy backdrop as negotiations over a new fiscal package intensify. Trump may seek rapid agreements on tariffs to strengthen his argument that tariff revenues will bolster the government’s financial outlook under the new bill.

Economic advisers are reportedly warning that introducing a risk premium on U.S. assets could harm investor confidence without delivering clear advantages.

Finally, Standard Chartered added that if U.S. policymakers choose to aggressively roll back previous measures, the dollar could unexpectedly strengthen beyond the bank’s current baseline scenario.