Euro to Dollar Forecast: CPI Data, Fed Policy in Focus as EUR/USD Near 1.1650

Modified: Monday, 11 August 2025 22:30 BST - Written by David Woodsmith

STORY LINK Euro to Dollar Forecast: CPI Data, Fed Policy in Focus as EUR/USD Near 1.1650

Euro Consolidates Near 1.1650, US Inflation Data Key for Next Dollar Move

The Euro to Dollar (EUR/USD) exchange rate is trading around 1.1650 on Monday from an early high at 1.1675. Ranges are relatively narrow, but underlying tensions remain high, especially with geo-political developments also important with markets monitoring the Ukraine situation and US-China trade dialogue.

UoB commented; “The current price movements are likely part of a range trading phase, most likely between 1.1610 and 1.1670.”

According to ING; “A stronger-than-expected US core CPI this week could push EUR/USD below 1.160, but such a move may attract buyers seeking to capitalise on the Fed’s resumption of its easing cycle. We maintain our expectation that EUR/USD will break above 1.170 in the near term.”

The issue of Federal Reserve policy and independence will remain key market issues and the latest US inflation data will be key components.

Danske Bank commented; “Market focus has shifted from tariffs toward US data and Fed appointments, and tomorrow's CPI - one of just two remaining before the September FOMC meeting.”

According to MUFG; “The main potential impediment to a rate cut as soon as at the next FOMC meeting in September would be a bigger than expected pick-up in US inflation over the summer. Market participants will be closely scrutinizing the release this week of the latest US CPI and PPI reports for July for further evidence of higher tariffs feeding through to a pick-up in inflation pressures.”


Consensus forecasts are for the headline inflation rate to edge higher to 2.8% from 2.7% with a 0.3% increase in core prices which would lead to a slight increase in the year-on-year rate to 3.0% from 2.9%.

MUFG added; “A significant upside inflation surprise could trigger a reversal of the current US dollar weakening trend.”

Over the weekend, Fed Governor Bowman stated that she would be backing rate cuts at all the remaining three Fed meetings this year.

There are still important reservations surrounding the potential politicising of key economic agencies.

According to sources, the administration is interviewing candidates to lead the Bureau of Labor Statistics (BLS), including E.J. Antoni, chief economist at the Heritage Foundation.

Antoni posted over the weekend; “There are better ways to collect, process, and disseminate data—that is the task for the next BLS commissioner, and only consistent delivery of accurate data in a timely manner will rebuild the trust that has been lost over the last several years.”

On the Euro side, ING is not convinced that the market call for no further ECB rate cuts is realistic.


Nevertheless, it added; “we regard any potential dovish repricing as a temporary setback within a broader trend of euro strength supported by a structurally weaker dollar.”

The latest CoT data, released by the CFTC recorded a small decline in long, non-commercial Euro positions, but the number remains elevated in historic terms, limiting the scope for further buying.

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TAGS: Euro Dollar Forecasts