Euro to Dollar Price Forecast: EUR/USD to Gain on Softening US Outlook

Modified: Thursday, 7 August 2025 07:15 BST - Written by Tim Boyer

STORY LINK Euro to Dollar Price Forecast: EUR/USD to Gain on Softening US Outlook

The Euro to Dollar exchange rate (EUR/USD) rose to around 1.16753 on Thursday ahead of the European open.

In the near term, President Trump’s nomination for the vacant Fed seat is expected to trigger a significant dollar move, either due to renewed fear surrounding Fed independence or a sense of relief.

According to UoB; “Today, we expect EUR to edge higher, but any advance is likely limited to a test of 1.1605. Support is at 1.1550; a breach of 1.1525 would indicate that the mild upward pressure has eased.”

ING continues to see risks to the dollar due to the US trade policies and pressure on the Fed; “an earlier-than-expected FOMC nominee by Trump risks swinging the balance more to the dovish side for the remaining three Fed meetings this year.”

According to the bank; “Our near-term target remains 1.17, and we see further gains later this year, but we have to acknowledge that the EUR/USD’s ability to rally within the 1.15-1.20 region is not as smooth as it was a couple of months ago.”

Speculation over President Trump’s nominee to replace Kugler who will leave her post on Friday will tend to dominate in the short term.

The implications for interest rates and Fed independence will be crucial for the dollar reaction.


According to Trump, there are four candidates in the frame. Two are known to be former Fed Governor Kevin Warsh and Director of the National economic council Kevin Hassett.

Former Treasury official Malpass is also seen as a candidate with current Governor Waller seen as a candidate to be the next chair.

The initial appointment would only be until January 2026 and another Senate vote would be needed to deliver a full term.

ING commented; “Warsh stands out as the most USD-friendly candidate at this stage. He is generally considered more hawkish than the others.”

The bank added; “Waller may be the second-best option from a dollar perspective, while Hassett and Malpass lean more dovish and may be perceived as more prone to giving way to Trump’s will. Their nomination would be a worse outcome for the dollar, in our view.”

According to MUFG; “While Trump may not fire Powell, having his pick to take over on the Board of Governors is now set to happen much sooner than expected that is likely to create much greater concern over political interference.”

It added; “Continued positioning liquidation of US dollar shorts is likely playing a role in curtailing renewed dollar selling but renewed weakness ahead looks more likely at this stage.”


There are still likely to be reservations over the Euro-Zone outlook, especially given that tariffs will have some negative impact on EU exports to the US.

Rabobank commented; “even though the USEU trade deal was slightly more favourable than we had accounted for in our projections for the Eurozone, the economy could still slip into a recession.”

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TAGS: Euro Dollar Forecasts