Euro to US Dollar Forecast: EUR Price Near 1.13 Zone

May 19, 2025 - Written by Frank Davies

STORY LINK Euro to US Dollar Forecast: EUR Price Near 1.13 Zone

US Dollar Sellers Return with a Vengeance, EUR/USD Exchange Rate Jumps to 10-Day High After US Downgrade

US assets were subjected to strong selling on Monday. Equity futures declined around 1.0% while Treasuries lost ground and the dollar index hit 10-day lows.

In this environment; the Euro to Dollar (EUR/USD) exchange rate surged to 1.1280.

According to ING; “1.1265 is the intra-day resistance EUR/USD needs to break to open the topside once again.” A break could lead to 1.1370.

Bank of America forecasts that EUR/USD will strengthen to 1.17 at the end of 2025.

According to Goldman Sachs; “Despite a somewhat brighter US outlook, we still expect the Dollar to weaken.”

The dollar has posted sharp losses following the move by ratings agency Moodys late on Friday to downgrade the US AAA credit rating.


The downgrade has come at a bad time for the dollar given the focus on US fiscal policy together with a debate over wider confidence in the currency.

According to Deutsche Bank’s George Saravelos; “the key problem for the US is that both the bond and currency markets have been insufficiently pricing in fiscal risks in the first place.”

The bank also noted the current attempts by the US Republican Congress to approve a tax bill which would put further upward pressure on the budget deficit over the medium term.

Saravelos also considers that it will be very difficult to reverse these fiscal changes during the current Presidential term.

He added; “The combination of diminished appetite to buy US assets and the rigidity of a US fiscal process that locks in very high deficits is what is making the market very nervous.”

ING commented; “Expect a risk premium to stay in the dollar this week, with investors also on the lookout for any currency references in trade deals currently being negotiated with Asia. We've also got a G7 Finance Ministers and Central Bank governors meeting taking place in Canada on Tuesday.

It added; “It seems very unlikely, but any changes to the FX reference in their Communique - driven by the US Treasury - would pose a big downside risk to the dollar.”


MUFG commented’ “The Moodys’ downgrade of the US sovereign rating serves as a reminder of the growing risk of foreign investors turning away to a greater degree from US Treasury securities.”

It added; “Episode of triple selling of US assets have been few and far between in recent years. Our analysis of these episodes (with 30yr yield at least 15bps higher) tend to point to further US dollar selling ahead.”

EU political developments will also be in focus with two key votes on Sunday.

Centrist mayor of Bucharest, Nicuşor Dan, is set to win Romania’s presidential election.

ING commented; “Not that it is normally a big driver of the euro exchange rate, but the outcome of the Romanian presidential election will be welcome news in Brussels as it prevents a further splintering of the bloc.”

The first round of the Polish Presidential election was potentially less comforting. Centrist Warsaw mayor Rafał Trzaskowski secured around 31.4% and radical-right historian Karol Nawrocki around 29.5%.

According to ING; “In Poland, the first round of the presidential election brought the expected candidates to the second round, but the gap between the candidates is significantly narrower than the polls suggested.”

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TAGS: Euro Dollar Forecasts