Euro to Dollar Forecast: EUR/USD "at 1.20 by End of 2025"

Modified: Thursday, 21 August 2025 22:15 BST - Written by David Woodsmith

STORY LINK Euro to Dollar Forecast: EUR/USD "at 1.20 by End of 2025"

The Euro to Dollar exchange rate (EUR/USD) has consolidated just below the 1.1650 level as narrow ranges have prevailed with the latest Fed chatter not causing sustained dollar damage.

UoB commented; “Momentum indicators are turning flat, and EUR is likely to trade within a range today, probably between 1.1630 and 1.1680.”

ING added; “We may see another tight 1.1620-1.1670 trading range in EUR/USD today, with the biggest chance of a breakout remaining Powell's speech tomorrow.”

According to Scotiabank; “The two-week range has been roughly bound between 1.1600 support and 1.1720 resistance, offering little in terms of near-term direction.”

ING is forecasting that EUR/USD will strengthen to 1.20 by the end of 2025.

There was little impact from Federal Reserve minutes from the July policy meeting with committee comments on economic risks seen to be outdated given the subsequent weak Jobs report.

Traders were still engaged in a waiting game ahead of Fed Chair Powell’s speech to the Jackson Hole symposium on Friday.


Markets are pricing in just below an 80% chance of a rate cut at the September meeting.

Funds will continue to monitor Administration efforts to influence the Federal Reserve Board and interest rates.

The latest spark of concern centred on Trump’s calls for Governor Cook to resign. The calls came after reports that she was being investigated for possible financial fraud.

According to Scotiabank; “Now, President Trump would apparently like to say “you’re fired” to Governor Cook, a centrist/dovish voice on the Board, amid accusations of mortgage fraud.”

It added; “If anything, these sorts of manoeuvres may make the Fed even less inclined to adjust policy in the short run. In the longer run, the perception of an erosion in the Fed’s independence may result in investors demanding a higher risk premium for holding USD-denominated assets.”

MUFG commented; “If she was forced to step down it would further increase President Trump’s influence on setting Fed policy. His influence on policy setting is already set to increase in the year ahead when Jerome Powell’s term as Fed Chair comes to an end in May.”

Commonwealth Bank of Australia senior economist Kristina Clifton also noted market concerns; "Perceived political interference in the Federal Reserve can undermine its independence, steepening the yield curve and denting the USD's safe haven status."


Administration rhetoric will continue to be watched very closely.

Earlier, the Euro-Zone recorded slightly stronger than expected PMI business confidence data.

ING commented; “The small increase in the composite PMI from 50.9 to 51.1 indicates that the eurozone economy continues to weather global storms quite well. Improvements in new orders and increased hiring add to a picture of accelerating growth, but a muted pace seems likely given significant downside risks to the outlook.”

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TAGS: Euro Dollar Forecasts