Euro to Dollar Price Forecast: EUR/USD Hits 1.17 After Soft US Inflation

Published: Wednesday, 13 August 2025 08:30 BST - Written by Frank Davies

STORY LINK Euro to Dollar Price Forecast: EUR/USD Hits 1.17 After Soft US Inflation

The Euro to Dollar (EUR/USD) exchange rate found strong support close to 1.1600 on Tuesday, advanced to just above 1.1650 after the latest US inflation data, and pushed higher to reach 1.1700 in Wednesday morning trading (UK time). The move reflects ongoing dollar softness following the CPI release and expectations for a Federal Reserve rate cut in September.

According to UoB; “EUR has likely entered a consolidation phase. For the time being, we expect EUR to trade between 1.1540 and 1.1685.”

Scotiabank added; “The medium-term range is bound between support just below 1.14 and resistance in the lower 1.18s. We see a near-term range bound between 1.1550 support and 1.1680 resistance.”

Danske Bank has a 12-month EUR/USD target of 1.23 on dollar losses.

US consumer prices increased 0.2% for July, but the year-on-year inflation rate held at 2.7% compared with consensus forecasts of a small increase to 2.8%.

Core prices increased 0.3%, in line with expectations while the annual rate increased to 3.1% from 2.9% and slightly above expectations of 3.0%.

There was a stronger increase for the super-core rate.


According to Scotiabank; “Inflation remains pernicious—a Bloomberg’s “Cheeseburger Index” reflects persistent price gains so far this year, suggesting heightened pressure on low-income households—but the Fed may have to balance that against signs that the US labour market is slowing as it considers its policy settings in September.”

Following the data, markets were even more confident that the Fed would cut interest rates at the September meeting.

Markets will also expect another barrage of criticism of Fed policy from President Trump and US Administration officials, especially given the headline inflation figure.

MUFG commented on the US inflation profile; “Recent trade deals have helped to dampen upside risks to US inflation through the rest of this year at least compared to initial fears when the Liberation Day tariff announcements were made in early April.”

A further 90-day extension to the US-China trade truce will also help curb

Commerzbank commented; “How the relationship between inflation and the US dollar develops further remains to be seen and will depend not least on how often and how strongly Donald Trump and his administration feel compelled to comment on the Fed's monetary policy."

The German ZEW economic sentiment index dipped to 34.7 for August from 52.7 the previous month and below consensus forecasts of 39.5 while the current conditions component also deteriorated on the month.


According to the ZEW; “Financial market experts are disappointed from the announced EU–US trade deal. In August 2025, the ZEW indicator experiences a substantial decline, also due to the poor performance of the German economy in the second quarter of 2025.”

ING noted that markets will also continue to monitor geo-political considerations. It noted; “Also contributing could be Trump’s attempt to downplay expectations for Friday’s summit with Putin, calling it a “feel-out meeting” to gauge Russia’s demands, and adding “that’ll be the end” if no agreement is reached. Markets had possibly priced in a slightly more optimistic stance on a quicker resolution.”

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TAGS: Euro Dollar Forecasts