Euro to Dollar Forecast: EUR Dips to 1.1370 on USD Short-Covering

June 6, 2025 - Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: EUR Dips to 1.1370 on USD Short-Covering

The Euro to Dollar (EUR/USD) exchange posted net losses after the latest US jobs data, although the dollar still struggled for sustained support.

After stalling above 1.1450, EUR/USD dipped to lows at 1.1370 before a rebound back to just above 1.1400.

Markets were braced for a very weak US labour-market report and the actual data provided an element of dollar relief with some closing of short positions into the weekend even though there were clear signs of weakness in the details.

Traders were also monitoring the fallout between Trump and Musk, especially as there could be significant implications for the Budget Bill which is due to be debated in the Senate next week.

Scotiabank maintains a positive outlook on EUR/USD; “the trend is bullish, with a clear sequence of higher lows and higher highs.”

It added; “The 50 day MA (1.1259) is an important medium-term support level. In the near-term, we look to support around 1.1380 and resistance above 1.1480.”

ING commented; “We suspect 1.1330/1350 may be the limit of the EUR/USD sell-off should US data not be as weak as the market is positioned for.”


According to the latest US employment report, non-farm payrolls increased 139,000 for May compared with consensus forecasts of around 125,000, but there was a notable downward revision for the April increase to 147,000 from the 177,000 reported previously.

There were losses in manufacturing, retail sales and professional services jobs for the month with government jobs also marginally lower.

ING commented; “Traditional sectors that typically signify a strong US economy have not been adding jobs in any meaningful way - think tech, business services, transport & logistics, construction, financial services etc.”

The unemployment rate was unchanged at 4.2% for the month, in line with expectations. There were, however, big changes in the underlying data with a decline in employment of close to 700,000 for the month as the civilian labour force declined by 625,000 on the month.

ING added; “A respectable jobs market in May with firm employment growth and stable unemployment, but the risks are skewed toward more weakness in coming months as trade uncertainty and concerns for consumer spending lead firms to become much more cautious on hiring.”

According to Commerzbank; “to put pressure on the greenback, the labor market would probably have to be significantly worse than expected.”

MUFG commented; “We probably need to see a print below the 100k to get the market moving and for pricing on a July FOMC rate cut to increase further.”


Following the data, markets were pricing in less than a 20% chance of a Fed rate cut at the end-July meeting.

Markets were also continuing to analyse Thursday’s ECB policy meeting with the 25 basis-point cut in the discount rate to 2.00% with hawkish rhetoric helping to underpin the Euro.

According to Rabobank; “President Lagarde was a bit more outspoken than we had expected. All in all, Lagarde did not give any reason to expect another rate cut, unless there is a significant escalation of trade tensions.”

Danske Bank added; “ECB President Lagarde's remarks during the press conference were to the hawkish side, indicating the rate cutting cycle may be nearing its conclusion. Following today's hawkish communication, we have revised our forecast, removing the July cut and targeting a final cut in September with a terminal rate at 1.75% (prior: 1.50%).”

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Euro Dollar Forecasts