Euro to US Dollar Forecast: "Upward Bias, for Now"

Modified: Thursday, 7 August 2025 17:30 BST - Written by Tim Boyer

STORY LINK Euro to US Dollar Forecast: "Upward Bias, for Now"

Fed Fears Continue to Drive the Dollar Lower, EUR/USD Nears 1.17 on Ukraine hopes

The dollar has remained firmly on the defensive while hope for progress in Ukraine ceasefire talks have underpinned the Euro with the Euro to Dollar (EUR/USD) exchange rate strengthening to 10-day highs near 1.1690.

According to UoB; “The increase in momentum suggests EUR is likely to trade with an upward bias for now. Currently, it is unclear whether if it can reach 1.1720. To sustain the momentum, EUR must hold above the ‘strong support’ level, currently at 1.1560.”

ING commented; “On EUR/USD, our call for today is neutral, but the balance of risks remains tilted to the upside, even beyond 1.170.”

Federal Reserve appointments will remain a key element for the dollar and wider markets.

President Trump has pledged to announce a replacement for Board member Kugler by the end of this week.

There is still uncertainty whether Trump will look to nominate someone to just serve the remainder of Kugler’s term until January or whether he will look to nominate the next Fed Chair with this pick.

National Australia Bank (NAB) head of FX research Ray Attrill commented; "if Trump is going to make an announcement about who he wants to fill the vacant board seat, depending on how credible (the markets) view that candidate to be, I think that has the potential to prompt some reaction across everything."


He added; "For me, that's potentially the biggest swing factor for the next sort of 48 hours or so."

There are still important concerns over political interference in central bank policymaking.

According to IG market analyst Tony Sycamore; "All those things suggest that we're seeing those political risks around the U.S. dollar increase, and on top of that you've got the weak data coming through."

Markets remain very confident that the central bank will cut interest rates at the September meeting with markets pricing in around a 93% chance of a cut.

NAB's Attrill injected a note of caution; "At the moment, I think we're sort of the view that maybe there's a bit too much confidence in the market about the certainty of a September move."

On the Euro side of the equation some hopes for progress in peace talks surrounding the Russia/Ukraine war have provided an element of support for the single currency.

On ECB monetary policy ING commented; “It would appear that the bar for additional rate cuts in the eurozone has been raised.”


The latest German data, however, was weaker than expected with industrial production declining 1.9% for June compared with consensus forecasts of a 0.4% retreat.

According to ING; “tariffs will impact the eurozone just as their adverse effects will be seen in America, and the ECB may be premature in declaring any victory. In this global economic power play, eurozone monetary policy offers a rare moment of calm.”

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TAGS: Euro Dollar Forecasts