Euro to Dollar Near-Term Forecast: "Favour a Move to 1.150"

July 20, 2025 - Written by Frank Davies

STORY LINK Euro to Dollar Near-Term Forecast: "Favour a Move to 1.150"

The Euro to Dollar exchange rate (EUR/USD) found support below 1.1600 on Friday and rallied to around 1.1665 with markets still unsettled by concerns that Fed policy will be politicised.

According to UoB; “The rebound and slowing momentum suggests that instead of continuing to weaken, EUR is more likely to trade sideways, probably between 1.1585 and 1.1655.”

ING considers that there could be a more dovish than expected ECB stance next week and added; “That is another factor keeping us moderately bearish on EUR/USD, and we continue to favour a move to 1.150 in the near term.”

According to Scotiabank; “this week’s price action has revealed meaningful support below 1.1600 and today’s gains offer the signs of a possible recovery following the pullback from late June. We look to a near-term range bound between 1.1580 support and 1.1700 resistance.

Longer-term, BNP Paribas expects EUR/USD gains to 1.20 at the end of 2025.

The US University of Michigan consumer confidence index edged higher to 61.8 for July from 60.7 previously and just above consensus forecasts while inflation expectations declined on the month.

Surveys of Consumers Director Joanne Hsu commented; “While sentiment reached its highest value in five months, it remains a substantial 16% below December 2024 and is well below its historical average.


The US interest rate debate will continue, with or without further intervention from President Trump amid his relentless pressure for Fed Chair Powell to resign.

Fed Governor Waller stated on Thursday that the central bank should cut rates at the July policy meeting.

According to Waller, rising risks to the economy favour easing the policy rate now. He considers that there is mounting evidence that the labour market is growing weaker and that delaying cuts runs the risk of needing more aggressive action later.

In this context, he considers that a cut in July would give the Fed space to hold for a few meetings.

MUFG commented; “While FOMC members always express differing views, the call for a rate cut from Waller was much more explicit than is normal for a Governor.”

It added; “So his stance has hardened quickly and while Waller denies it is motivated by politics many will likely take that view. Governor Michelle Bowman on 23rd June also indicated her potential support for a rate cut in July. Both Waller and Bowman were appointed to the Board of Governors by President Trump.”

According to Scotiabank; “More generally though, President Trump’s continued attack on Fed Chair Powell after yesterday’s better-than-expected data may be weighing more on USD sentiment. Ramping up criticism of the Fed won’t change much in the short run.”


The ECB will hold its latest policy meeting next week with expectations that the deposit rate will be held at 2.0%.

Danske Bank commented; “We expect the ECB to leave the deposit unchanged at 2.00% on Thursday 24 July in line with consensus and market pricing. We expect Lagarde to reiterate the data dependent approach and leave the door open for September, without giving firm signals as data has been limited.”

According to ING; “A cut is highly unlikely given recent communication, but tariff risks and a strong euro could revitalise a dovish front that otherwise seemed settled on a neutral pivot.”

Scotiabank pointed to underlying uncertainty; “Trade policy uncertainty remains a near-term headline risk into early August, and we note the absence of any material progress in US/ EU talks.”

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TAGS: Currency Predictions Euro Dollar Forecasts