For US-based investors and expatriates, the USD/EUR exchange rate in 2026 will be a quiet but powerful driver of French property value and financing strategy. Currency moves can amplify returns or erode them, depending on how you structure your purchase and how you finance your acquisition.

In this article, we outline the key USD/EUR dynamics for 2026, what they mean for the attractiveness of French real estate to US residents, and how borrowing in euros can mitigate exchange-rate risk over the life of the investment.

• Why the USD/EUR rate is a decisive factor for US-based buyers
• How 2026 macro trends may influence the currency pair
• How euro-denominated borrowing naturally hedges your exposure
• Practical structuring ideas for HNW and ultra-HNW clients

This article draws on current French mortgage market conditions for 2025, including the continued attractiveness of local euro financing for non-resident, international buyers, where we see long-term fixed rates and structurally conservative lending practices that remain very competitive versus US funding costs.

1. USD/EUR: Why It Matters So Much for US-Based Buyers

When a US investor buys French property, three currency dimensions are in play:

• Entry cost: The dollar cost of the purchase price in euros at the time of acquisition.
• Ongoing cash flows: Rental income, running costs, and mortgage payments, typically in euros.
• Exit value: The dollar value of the eventual sale proceeds, which depends on both the euro property price and the USD/EUR rate at exit.

A stronger dollar (lower EUR/USD) makes the initial purchase cheaper in dollar terms, but reduces the dollar value of euro rental income and any future resale proceeds. A weaker dollar (higher EUR/USD) makes the entry more expensive, but enhances the dollar value of all future euro cash flows and the exit price.

2. 2026 Outlook: A “Two-Speed” Story for US Investors

Heading into 2026, most central bank and macro research houses focus on three themes:

• Converging interest rates: The gap between US and eurozone policy rates is expected to narrow gradually as the Federal Reserve normalizes from previous tightening cycles and the European Central Bank manages inflation closer to target.
• Moderating US growth: After several years of relatively strong US performance, consensus expectations point to slower, more trend-like growth, which historically reduces the scope for prolonged dollar strength.
• Residual volatility: Geopolitics, elections, and divergent fiscal positions in both the US and eurozone are likely to result in episodes of heightened volatility, even if the medium-term range for USD/EUR remains bounded rather than trending aggressively.

In practical terms, many institutional and private-bank forecasts cluster around a broad trading range rather than an extreme directional call for 2026. That implies:

• The scope for a dramatic structural move in USD/EUR may be lower than in previous shock years.
• But short- to medium-term swings of 5–10% remain highly plausible, and that range is material when dealing with multi-million-euro assets.

For high-net-worth buyers, the message is not to attempt to “trade the currency” but to treat EUR exposure as an asset-allocation decision and manage it explicitly.

3. How Exchange Rates Affect the Attractiveness of French Property

French prime and secondary markets continue to look attractive in 2025–2026 relative to many other developed markets, supported by:

• Competitive euro mortgage rates for non-residents, with 15–20+ year fixed rates that remain materially below typical US 30-year mortgage rates and often below yields on US high-yield cash and short-duration fixed income.
• Conservative lending standards (loan-to-income caps, equity requirements) that have historically dampened speculative excess and provided relative price stability.
• Tax-planning benefits for HNW clients, including French wealth tax (IFI) optimisation by holding leverage against high-value property, thereby reducing taxable real-estate equity.

In that context, USD/EUR can tip the balance in either direction:

• If the dollar is strong, US buyers effectively receive a “discount” on euro property values; the same dollar budget buys more square meters, particularly in secondary but high-quality regions.
• If the dollar is weak, the property looks more expensive initially in dollar terms, but the prospective euro income and capital gains translate back into more dollars over time, enhancing long-term total return.

The question becomes how to reduce the risk that an adverse shift in USD/EUR undermines the investment thesis—particularly for those relying on US-dollar liquidity and income streams.

4. Why Borrowing in Euros Is a Natural Hedge

For US-based buyers, one of the most powerful risk-management tools is to finance in the same currency as the underlying asset—in this case, euros. This alignment creates several important effects:

• Asset–liability matching: Both the property and the mortgage are denominated in euros. Any fall in the euro against the dollar reduces the dollar value of both the asset and the debt. Your net equity in dollar terms moves, but the liability side automatically adjusts.
• Rental income in euros vs. euro debt service: For rented properties, both income and loan repayments are in euros. This significantly reduces the operating risk from currency moves; USD/EUR volatility mainly affects the translated returns, not the underlying cash-flow coverage.
• Limited need to time FX conversions: Instead of converting the full purchase price at one point in time, you convert smaller amounts of dollars into euros over the life of the loan (to cover down payment, fees, and periodic top-ups if needed). This effectively “averages” your entry rate across many years.

In 2025, euro mortgage rates for non-resident international buyers remain highly competitive, with long-term fixed-rate products offering visibility and stability that are often unavailable in other jurisdictions. US-based clients frequently find that locking a low or moderate fixed euro rate provides both an interest-rate anchor and a currency-management tool within a single structure.

5. Using Euro Debt to Mitigate a Poor Exchange Rate at Entry

Consider a scenario where the dollar is relatively weak at the time you wish to buy, making the euro “expensive” in USD terms. Borrowing in euros can mitigate this in several ways:

• Lower immediate FX conversion: If you finance, for example, 60–70% of the purchase price in euros, you only need to convert 30–40% of the property value into euros at the unfavourable rate for your initial equity contribution.
• Deferred FX exposure: Over the mortgage term, you can fund euro repayments either from euro income (e.g. rental) or by periodically converting dollars. If the dollar strengthens at a later date, subsequent conversions may occur at a better rate, improving your effective blended FX cost.
• Potential upside if EUR later weakens: If the euro depreciates against the dollar after you have taken out a fixed-rate euro loan, the real dollar cost of repaying that euro debt falls. You will be extinguishing a euro liability with increasingly “cheaper” dollars.

For HNW and ultra-HNW clients, this approach is often combined with broader balance-sheet thinking. Euro property can sit alongside euro-denominated liabilities, European operating income, or future lifestyle spending in the eurozone, turning what might otherwise look like “FX risk” into a deliberate geographic and currency diversification. In that framing, the question is not whether USD/EUR moves up or down in any given year, but whether the overall structure remains resilient across multiple currency regimes.

Conclusion: Structure Matters More Than Forecasts

Looking ahead to 2026, the most important takeaway for US buyers of French property is that exchange rates are unlikely to deliver a one-way, easily predictable outcome. Instead, they will continue to fluctuate within a range that is large enough to matter for real assets, but not so extreme that it can be reliably traded or timed.

Against that backdrop, the winning strategy is structural rather than speculative. Financing in euros, matching assets and liabilities, and spreading FX exposure over time can materially reduce the risk that currency movements overwhelm the underlying real-estate fundamentals. For buyers with a long-term horizon—whether lifestyle-driven expatriates or return-focused investors—this approach allows French property to function as what it should be: a stable, income-generating euro asset, not a leveraged FX bet.

In short, USD/EUR in 2026 will influence outcomes, but it does not need to dictate them. With thoughtful structuring and euro-denominated financing, US buyers can participate in the French property market with far greater confidence—whatever the dollar happens to do next.