Euro to Dollar Forecast: EUR/USD Outlook Brightens as Dollar Wobbles Near 1.17

Modified: Monday, 1 September 2025 22:15 BST - Written by Tim Boyer

STORY LINK Euro to Dollar Forecast: EUR/USD Outlook Brightens as Dollar Wobbles Near 1.17

The Euro to Dollar exchange rate (EUR/USD) pushed higher at the start of the week, breaking above 1.1700 to trade around 1.1735 as dollar sentiment stayed fragile and the Chinese yuan extended its gains.

Analysts at ING see scope for EUR/USD to test 1.1750 and potentially challenge the year’s high near 1.1830, while upcoming US labour market data and President Trump’s battles with the Federal Reserve and tariff rulings add further uncertainty to the dollar outlook.

EUR/USD Forecasts: Close to 1-Month Highs

The Euro to Dollar (EUR/USD) exchange rate has made a more successful attack on resistance above 1.1700 to trade around 1.1735 on Monday amid a fragile dollar tone and further gains the Chinese yuan.

According to ING; “We think there are enough dollar negatives out there for EUR/USD to trade through 1.1750 resistance and give the year's high at 1.1830 a good test.”

UoB considers that a break above 1.1780 is required to signal a sustained advance.

US markets will be closed on Monday, but data releases for the week, as a whole, are likely to have a substantial impact and potentially set the tone for the next few weeks.

In particular, labour-market data will be crucial, culminating in the key Friday employment report.

Last month’s weak report, particularly substantial downward revisions, were key in driving frenzied speculation over a Fed U-turn.

Jeopardy surrounding this week’s release has been magnified by President Trump’s move to dismiss the head of the BLS following last month’s data.

Commonwealth Bank of Australia currency strategist Carol Kong commented; "Any downward surprises to the U.S. labour market data this week will increase market expectations of a rate cut, and that will further give us clues as to whether that cut will be a normal 25-basis-point cut or an outsized 50-basis-point cut."

President Trump’s attempt to remove Governor Cook from the Federal Reserve Board is heading for the Supreme Court.

Elsewhere, an appeals court has upheld a lower-court ruling that The Administration’s reciprocal tariffs are not constitutional.

This ruling would apply to around 50% of the tariffs announced and injected another element of uncertainty. The tariffs will remain in place until the Supreme Court decides whether to take up the case.

MUFG commented; “Given the ongoing risk that the IEEPA tariffs could be legally overturned, the Trump administration will be looking into other legal authorities to achieve a similar tariff outcome. For example, the legality of the sector specific tariffs implemented under Section 232 of the Trade Expansion act are not being questioned.”

It added; “As a result even if the Supreme Court ruled against the Trump administration on IEEPA tariffs, it may prove to be only a temporary setback.”

The Chinese yuan has continued to post gains in global markets which will tend to underpin EUR/USD.

Saurabh Tandon, global head of foreign-exchange options at Standard Chartered Bank in Singapore commented; “We have seen a pickup in demand for downside for dollar-offshore yuan, mainly from hedge fund clients.”

MUFG added; “By allowing the renminbi to strengthen modestly ahead of trade talks with the US in the autumn, it may help to create a more supportive backdrop for a deal.”

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TAGS: Euro Dollar Forecasts