Euro to Dollar Forecast: 1.20 Rebound Tipped Despite Fresh 10-Week Lows

Modified: Tuesday, 14 October 2025 22:30 BST - Written by Frank Davies

STORY LINK Euro to Dollar Forecast: 1.20 Rebound Tipped Despite Fresh 10-Week Lows

The Euro to Dollar (EUR/USD) exchange rate slipped to 10-week lows near 1.1550 on Tuesday as investors shunned risk amid renewed trade-war fears and French political turmoil. Despite the weakness, ING continues to forecast a rebound to 1.20 within three months, citing fading U.S. strength and seasonal support for the Euro.

EUR/USD Forecasts: Re-Tests 10-Week Lows

The Euro was unable to take advantage of fundamental dollar vulnerability on Tuesday with markets fretting over the French political situation while fears over escalating US-China trade tensions created an important element of caution across asset classes.

The on-going US government shutdown added to uncertainty with key data releases still unavailable.

The Euro to Dollar (EUR/USD) exchange rate dipped to re-test 10-week lows near 1.1550 as the dollar advanced against risk-sensitive currencies.

UoB is not backing further significant losses at this stage; “Today, EUR could dip below last week’s low of 1.1540, but based on the current momentum, a sustained decline below this level is unlikely.

According to TD Securities global FX strategist Jayati Bharadwaj; "What's going on in markets is basically a positioning adjustment."

Markets are continuing to monitor French political developments with Prime Minister Lecornu attempting to break the current impasse

ING commented; “Today, PM Lecornu is set to speak to parliament before announcing his budget proposal tomorrow, which will ultimately determine his chances of surviving a no-confidence vote, which is expected for Thursday.”

It added; “Another government collapse this week will likely make the euro miss out on any benefits from further escalation in the US-China trade spat. And should the tariff story de-escalate, EUR/USD would likely set its eyes on 1.150.”

ING is still backing EUR/USD gains to 1.20 on a 3-month view and added; “Lower US hedging costs and seasonal trends suggest recent $ strength won't last.”

Traders will take greater notice of US surveys given the absence of major data releases.

The US NFIB small-business confidence index dipped to 98.8 for September from 100.8 previously.

The Uncertainty Index rose 7 points from August to 100, the fourth-highest reading in over 51 years.

NFIB Chief Economist Bill Dunkelberg commented; “Optimism among small business owners decreased in September. While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges.”

Marc Chandler, chief market strategist at Bannockburn Capital Markets expects medium-term dollar losses; "In the three- to six-month view, I think the dollar is going to be falling because I think the U.S. economy is going to weaken and the interest rates are going to come down."

The German economy is still struggling to make any headway.

The ZEW investor confidence index improved to 39.3 for October from 37.3 the previous month, although this was slightly below market expectations.

ZEW President Professor Achim Wambach commented; “Experts are still hoping for an upturn in the medium term. Despite persistent global uncertainties and the lack of clarity regarding the implementation of the state investment programme, the ZEW indicator sees a slight increase in October.”

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Euro Dollar Forecasts