Euro to Dollar Week Ahead Forecast: Below 1.15 on Oil, Gold Price Rally?

June 23, 2025 - Written by Frank Davies

STORY LINK Euro to Dollar Week Ahead Forecast: Below 1.15 on Oil, Gold Price Rally?

Iran developments will dominate in the near term. Looking at overall developments, ING expects that the Euro to Dollar exchange rate (EUR/USD)will not be able to sustain moves above 1.1500 this year.

According to ING; “The current USD risk premium already embeds plenty of negatives, and 1.15 can prove the anchor, rather than the starting point for another major rally, at least this year.”

Danske Bank, however, still expects gains to 1.20 on a 12-month view.

EUR/USD posted a limited loss during the week, primarily due to the Middle East situation. The pair regained 1.15 on Friday following reports that the US would delay any military strikes on Iran for up to two weeks.

The US, however, deployed B2 bombers over the weekend to attack Iran’s three main nuclear sites with “bunker-busting” bombs. At this stage, there has been no retaliation from Iran while damage assessments are on-going.

Indicative prices suggest EUR/USD will trade back below 1.1500 with strong gains for oil and gold.

Markets will continue to monitor Middle East developments closely, with a particular focus on oil and gas prices. Any sustained spike in energy prices would tend to undermine the Euro.


According to Danske Bank; “For EUR/USD specifically, further escalation in the Middle East remains one of the few near-term risks that could cap the topside, as Europe remains particularly vulnerable to energy shocks.”

Credit Agricole commented; “The unfolding Israel-Iran war is yet another shock for financial markets still coping with ongoing uncertainty surrounding the fate of US tariffs on the rest of the world.”

There will continue to be high degree of uncertainty with a focus on the Iran regime’s next moves.

According to Credit Agricole; “Investors appear to be assuming the Israel-Iran conflict will not spill over into a broader regional conflict and that Iran will not block the Straits of Hormuz and disrupt global energy supply chains.”

If there is any move to block oil shipping, there will be a substantial market reaction with net dollar gains.

The Federal Reserve held interest rates at 4.50%, in line with market expectations.

The central bank was slightly less concerned over the risk of substantial economic dislocation from tariffs, but did not sound the ‘all clear’.


The median committee view was for two rate cuts over the second half of the year, but with a divergent trend.

BNPP noted that a large minority, including Chair Powell, favour keeping policy on hold past year end and tends to back this view.

It added; “Data releases over the course of the summer will be of great importance. If the data show little inflation or a substantial rise in unemployment, that would be a cause to argue for earlier cuts.”

There will continue to be a wider debate surrounding the structural dollar outlook.

According to Danske Bank; “we continue to view any bouts of USD strength as opportunities to fade, given persistent medium- to long-term macro and policy headwinds.”

ING commented; “We are not forecasting a dollar capitulation, but instead a new normal of structural USD weakness. In such an environment, local stories can take a more central role, for instance in determining which currencies stand to benefit most if global instability returns – as a return of the USD’s safe-haven appeal looks unlikely.”

It added; “The ECB is championing the idea of a “global euro moment”, which can keep EUR attractive, but equally faces political obstacles.”

Credit Agricole is not convinced by the capital outflows argument; “we also note that recent client discussions have suggested that portfolio rebalancing out of the US could be less aggressive than feared given the lack of credible alternatives to US technology companies for example.”

BNPP notes limited capital outflows so far, but added; “we remain confident in our short USD trades against the EUR.”

Goldman Sachs commented; “While we expect further Dollar weakness, investors now perceive more two-way risks. Some argue the depreciation may be overdone, especially given resilient US asset returns.”

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