Euro to Dollar Price Forecast: Stalls at 1.1350, EUR Bullish Trend

May 22, 2025 - Written by Frank Davies

STORY LINK Euro to Dollar Price Forecast: Stalls at 1.1350, EUR Bullish Trend

Markets remain extremely uneasy over the outlook for US bonds and the dollar, but global reservations have also increased.

The latest US data also offered some relief surrounding potential growth trends, but reinforced fears over inflation.

The Euro was unable to gain any support from the latest round of data releases, especially with a weaker than expected reading for the key services sector.

The Euro to Dollar (EUR/USD) exchange rate was unable to break above 1.1350 and edged below 1.1300 in US trading.

According to ING; “We generally deem a move to 1.150 in EUR/USD as premature given the lack of hard evidence on the economic damage in the US from tariffs.

Scotiabank commented; “the medium-term trend remains bullish, given the sequence of higher lows and higher highs since February.”

It added; “Near-term resistance is limited ahead of 1.15 and near-term support is expected below 1.12.”


After sliding on Wednesday, Treasuries remained under pressure with the 10-year yield close to 4.60% and testing 3-month highs.

There was some relief that further losses were avoided after the US House approved the budget Bill

Scotiabank commented; “the performance of US Treasury bonds will likely continue to influence the USD and risk appetite. Investors may be resigning themselves to the fact that there is unlikely to be any fiscal consolidation for the foreseeable future. A further rise in US yields may weigh on risk appetite but fail to provide the USD with much support.”

Ahead of the New York open the House of Representatives approved the Administration Big and Beautiful Tax Bill by a 215-214 vote and will now move to the Senate.

The Committee for a Responsible Federal Budget estimated the cost at $3.1 trillion over the next decade.

Rabobank commented; “Perhaps inspired by Moody’s downgrade, markets are finally taking notice that the fiscal outlook is, actually, completely unhinged. There is no serious effort at fiscal consolidation or to reduce the structurally large deficits.”

As far as data is concerned, the US PMI manufacturing index increased to a 3-month high of 52.3 for May from 50.2 previously and above consensus forecasts of 49.9.


The services-sector index also improved to a 2-month high of 52.3 from 51.0 and above expectations of 51.0 while business confidence increased to a 4-month high.

There was a further sharp decline in exports, notably on services, with the weakest reading since 2020.

Average prices charged increased at the fastest rate since August 2022.

The increase in price charged and supply-side difficulties will reinforce unease surrounding inflation trends.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence commented; “Business confidence has improved in May from the worrying slump seen in April, with gloom about prospects for the year ahead lifting somewhat thanks largely to the pause on higher rate tariffs.”

He added; “Supply chain delays are now more prevalent than at any time since the pandemic led to widespread shortages in 2022, and prices charged for both goods and services have spiked higher as firms and their suppliers seek to pass on tariff levies to customers.”

Euro-Zone PMI business confidence data was mixed.

ING commented; “The composite PMI declined from 50.4 to 49.5 in May, indicating that the eurozone is falling back into stagnation. It's worrisome that the main culprit is the service sector, which has long been the main engine of growth for the eurozone.”

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TAGS: Euro Dollar Forecasts