Euro to US Dollar Forecast: "More Sustained, Notable Pullback Likely"

July 8, 2025 - Written by Frank Davies

STORY LINK Euro to US Dollar Forecast: "More Sustained, Notable Pullback Likely"

The U.S. Dollar (USD) has secured net gains against the Pound Sterling (GBP) and Euro (EUR) on Monday with support from higher bond yields and hopes that the US Administration would take a measured stance on trade tariffs.

The Euro to Dollar (EUR/USD) exchange rate dipped to re-test 1-week lows just below 1.1720.

UoB commented; “as long as 1.1715 (‘strong support’ level) is not breached, there is a slim chance for EUR to rise toward 1.1830 before a more sustained and notable pullback is likely.”

Scotiabank focussed on medium-term support levels; “EURUSD is extending its pullback from recent highs but still looking bullish from a longer-term perspective. We look to near-term support around 1.1620 and 1.1580 and continue to highlight the importance of the 50-day MA (1.1436). Near-term resistance is expected at 1.1800.”

ING outlined the current trade situation; “We have deals for the UK and Vietnam. We have a truce with China, and for the rest, it is a question of whether last-minute deals are struck, whether tariffs are substantially increased or whether fresh extensions are announced. All seem possible.”

The bank added; “There is an outside risk to the 1.1900/1910 area if Washington did misjudge the mood and equities were marked heavily lower. But that seems unlikely. We tend to favour consolidation in a 1.1700-1.1830 range this week.”

Relations and negotiations with the EU will be one key focus.


Olof Gill, the EU trade spokesperson, told reporters during a daily press briefing that: “We want to reach a deal with the U.S. We want to achieve win-win outcomes, not lose-lose outcomes”.

European Commission President Ursula von der Leyen commented that she had a “good exchange” on Sunday

Danske Bank commented; “The risk of Donald Trump resuming aggressive tariff hikes is still looming in the background, but for now it appears likely that the highest tariff rates announced on April's 'Liberation Day' will not be reinstated. While near-term concerns are easing, a sense of structural shift in investors' appetite for US assets is still lingering in the air.”

According to Scotiabank; “Some consolidation in the broader USD trend would not be a surprise after the extended run lower seen in H1.”

It added; “However, trade, fiscal and monetary policy risks remain high for the USD and a sustained recovery seems unlikely at this point. We rather think the USD sell-off risks extending in the coming months as investors adjust exposure to USD-denominated assets amid worries about policy repercussions.”

Credit Agricole is more positive on the dollar; “we also think that the US economy could start showing some signs of resilience as the prospect for lower personal income taxes starts to offset the impact the impact of tariffs on consumers. This, together with the surprising strength of the US labour market, could keep Fed rate cut bets at bay for now, in a boost for the USD.”

German industrial production increased 1.2% for May after a revised 1.6% decline the previous month.


ING commented; “For the nearer term, downside risks have clearly increased on the back of ongoing trade tensions, but also the stronger euro as well as the dry and hot summer weather.”

Despite these risks the bank maintains a positive stance; “Still, the fact that the German government is implementing its fiscal plans without setbacks is keeping hopes high for more investment and stronger growth in 2026 and beyond.”

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TAGS: Euro Dollar Forecasts