Euro to Dollar FX Forecast: "Medium-term Trend Remains Bullish"

June 30, 2025 - Written by Ben Hughes

STORY LINK Euro to Dollar FX Forecast: "Medium-term Trend Remains Bullish"

The dollar was under pressure in Asian trading on Monday, but managed to avoid fresh 3-year lows with the Euro to Dollar (EUR/USD) exchange rate hitting resistance close to 1.1750 and consolidating around 1.1715 after weaker than expected German inflation data.

According to Scotiabank, the [EUR/USD] trend is still positive; “the medium-term trend remains bullish as we’ve observed a multi-month sequence of higher lows and higher highs since March.”

It added; “We see little resistance ahead of the upper-1.18 area and expect the near-term range to be bound between support below 1.1680 and resistance around 1.18.”

ING sees scope for dollar resilience; “Our baseline remains a return to 1.15-1.16 on the back of a hawkish repricing in Fed expectations once data fails to endorse latest rate cut bets.”

Nevertheless, it continues to see dollar risks and a possible further EUR/USD surge; “Even so, the current mix of downside risks for the dollar makes the first half of July one of the best windows for a potential attempt at 1.20.”

There are multiple risk events this week and a Friday US holiday. Fiscal policy and labour-market data will be watched closely with markets also monitoring trade developments and Administration Fed talk.

On Friday, Fed Chair Powell was again criticised strongly.


According to Trump “I’d love him (Powell) to resign if he wanted to. He’s done a lousy job.”

He added; “I’m going to put somebody that wants to cut rates.”

RSM chief economist Joe Brusuelas stated that any move could be counter-productive; “Undermining Powell is in no one’s best interest as it will almost certainly translate to a weaker dollar and rising rates.”

ING commented on Fed policy; “Markets are fully pricing in a September cut, and roughly one in five chances of a July cut. This is markedly dovish relative to the latest cautious Fed communication, but given that two FOMC members have openly discussed a July move, markedly disappointing data this week could prompt another round of heavy dollar selling.”

Commonwealth Bank of Australia commented; "USD will be driven by U.S. trade developments this week in our view."

According to the bank; "We are sceptical so many trade deals can be agreed so quickly."

It added; "Nonetheless, news that some trade deals have been agreed will support the USD against the major currencies - EUR, JPY and GBP.”


Fiscal policy will also be watched closely with the Administration putting strong pressure on Senate Republicans to pass the Budget Bill this week.

MUFG commented; “Market attention has been focusing more on the negative impact on the US government’s fiscal outlook rather than potential support for growth in the coming years which has been contributing to negative sentiment towards the US dollar.”

According to Scotiabank; “Volatile trade and loose fiscal policy plus the president’s continued attacks on the Fed’s leadership are undermining the appeal of the USD and US assets more broadly for international investors who find themselves perhaps overexposed to US highly valued assets and underhedged on the weakening USD.”

The headline German inflation rate declined to 2.0% for June from 2.1% previously and below consensus forecasts of 2.2%.

The Euro-Zone data will be released on Tuesday with the headline rate expected to edge higher to 2.0% from 1.9%.

A figure below 2.0% would invite some fresh speculation over another ECB rate cut during the third quarter and curb Euro support.

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