EUR/USD Forecast: Euro Price Above 1.1450 on Dollar Vulnerability

June 5, 2025 - Written by Frank Davies

STORY LINK EUR/USD Forecast: Euro Price Above 1.1450 on Dollar Vulnerability

The Euro to Dollar exchange rate (EUR/USD) was resilient after the ECB rate cut and it tested resistance above 1.1450 to trade around 1.1465 in choppy trading with traders eying 1.1500.

The dollar secured a limited boost following news that President Trump and Chinese President Xi had held a phone call, but the currency failed to gain sustained support.

According to Scotiabank the overall trend remains bullish; “the latest resistance has been observed in the mid-1.14s. A break of the local high would shift the focus to the April 21 high in the upper 1.15s.”

ING sees the risk of a decline to at least 1.1350, but added; “we would expect more buying to emerge there ahead of what could be dollar bearish NFP release tomorrow.”

Overall confidence in the US economy remains notably fragile.

US initial jobless claims increased to 247,000 in the latest week from a revised 239,000 previously. This was above consensus forecasts of 236,000 and the second-highest reading since July 2023.

Continuing claims edged lower to 1.90mn from 1.91mn the previous week.


Challenger reported that layoffs had increased 47% over the year.

The data maintained concerns over the labour market heading into Friday’s monthly jobs report.

Consensus forecasts are for an increase in non-farm payrolls of around 125,000 with the unemployment rate expected to remain at 4.2%.

Scotiabank commented; “Market expectation appear to be adjusting in anticipation of a soft NFP report Friday but a weak number will undercut the USD further.”

Scotiabank also expressed reservations surrounding the wider US fundamentals; “Beyond the data, news of tariff negotiation progress remains scant and signs of friction in the Republican part around President Trump’s tax cut bill adds to the unhelpful uncertainty around the outlook.”

It added; “We think the DXY could lose as much as another 5-10% in the next few months.”

The ECB cut interest rates by 25 basis points following the latest council meeting which was in line with strong consensus forecasts.


According to the central bank the decision was based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.

The bank is confident that inflation will settle close to the 2% target while increased government investment and military spending will help underpin the growth outlook.

The statement provided little in the way of guidance while bank President Lagarde called the inflation outlook more uncertain than usual.

Schroders Eurozone Economist Irene Lauro commented; "While the ECB delivered a widely expected rate cut today, we would not count on a follow-up next month. Inflation was lower than expected in May, with services inflation falling sharply. Yet, with no signs trade tariffs are weakening growth, we expect the ECB is likely to pause from today.

She added; "With rates now at the midpoint of their estimated neutral range, the bar for further cuts has risen. Having already eased by 1.75% in this cycle, the ECB can afford to shift from urgency to patience."

ING, however, expects a further rate cut; “Even if the eurozone economy has shown some unexpected resilience and trade tensions could still fade, the risk of inflation undershooting target has become pressing enough for the ECB to cut rates once again.”

The Euro-Zone continues to run a substantial current account surplus which will provide important Euro protection.

Rabobank commented; “This year has brought periods when US equities, treasuries and the USD have all dropped at the same time illustrating that ‘sell America’ is the dominant theme. Creditor countries have been the beneficiaries.”

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TAGS: Euro Dollar Forecasts