Euro to Dollar Forecast: "The Push Above 1.17 is Important"

July 23, 2025 - Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: "The Push Above 1.17 is Important"

The Euro to Dollar exchange rate (EUR/USD) tested resistance levels just above 1.1700 on Tuesday before settling close to this level with a consolidation phase following sharp gains on Monday.

According to UoB; “Sharp and swift rally appears excessive; EUR is likely to consolidate in a range between 1.1665 and 1.1720.”

Scotiabank is now more positive on the Euro outlook; “the short-term price action has turned much more constructive following the recent pullback from the July 1 high. The push above 1.17 is important, and an extension of gains should pave the way for a resumption of the medium-term bull trend from the February low.”

It added; “we look to a near-term range bound between 1.1650 support and 1.1750 resistance.”

ING, however, sees the risk of a renewed setback; “We do not see sufficient bullish momentum to push EUR/USD back to the highs of early July (near 1.180), with 1.160 appearing a more appropriate anchor than 1.170, given the risks of further hawkish repricing by the Fed.”

Fed Chair Powell made no comment on the economy or monetary policy in his opening remarks on Tuesday and the central bank remains in the blackout period ahead of next week’s policy decision.

Markets remain convinced that there will be no change to rates in July, but unease over the threat to Fed independence remains a key talking point.


MUFG pointed to persistent underlying concerns; “One of the drivers of renewed dollar selling last week was the speculation on President Trump firing Fed Chair Powell. As we expected, this issue does not look like it will fade away and US Treasury Secretary Scott Bessent yesterday in a CNBC TV interview called for an enquiry into the “entire Federal Reserve institution” to assess whether it had been successful.”

Rabobank pointed to potential changes on the committee and the potential for Trump to appoint two Fed Governors within the next few months.

The bank added; “While the remaining FOMC participants should in theory be able to limit Trump’s impact, the recent behaviour of Waller and Bowman suggests that Trump has already gained a foothold in the FOMC. This means that we now expect more rate cuts in 2026 than we had earlier anticipated when we assumed that the FOMC would be able to keep monetary policy free from Trump’s influence.”

Scotiabank sees signs of renewed dollar vulnerability; “Broader dollar sentiment is weakening again, as reflected in dollar index risk reversal pricing slipping back to reflect a mild premium for 1– and 3-month USD puts relative to calls.”

It added; “Tariff uncertainty ahead of August 1 and rising long-run inflation concerns, prompted by the perception that Fed policy independence may be at risk, are weighing on USD sentiment.”

Trade developments will also be important ahead of President Trump’s August 1st deadline to reach deals.

ING noted that there has been increased speculation that there will be no US-EU deal which would ramp-up underlying tensions. The Euro and dollar could both be vulnerable depending on the overall dynamics.


The bank commented; “The euro’s ability to maintain preference over the dollar amid tariff tensions will depend on the extent of any escalation and whether the EU emerges as a relative loser while other countries secure significant deals with the US.”

The ECB will announce its latest interest rate decision on Thursday with no change in rates expected.

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TAGS: Euro Dollar Forecasts