Euro to Dollar Forecast: EUR/USD Jumps on Soft US CPI

Modified: Friday, 24 October 2025 14:45 BST - Written by Ben Hughes

STORY LINK Euro to Dollar Forecast: EUR/USD Jumps on Soft US CPI

The Euro to US Dollar exchange rate (EUR/USD) advanced to 1.163 on Friday after data showed that the US headline and core CPI rose less than expected.

The annual US inflation rate in September edged up to 3.0%, its highest level since January, but came in slightly below the 3.1% market forecast.

EUR/USD Forecasts: Held Near 1.1600

The Euro to Dollar (EUR/USD) exchange rate found support just above 1.1580 on Thursday and traded just above 1.1600 as tight ranges prevailed. US economic uncertainty hampered the dollar with key data releases due on Friday while higher oil prices tended to undermine the Euro.

Currency ranges were relatively narrow, but there was further volatility in energy and metals. Rabobank warns that further volatility is inevitable amid a new world order; “there is a very high probability that the whirlwind of crazy headlines so far in 2025 have just been a warm-up for what is yet to come. After all, the Trump admin is still laying the foundations for a new US and global economy.”

UoB commented; “The rebound from oversold conditions suggests that instead of weakening, EUR is more likely to range-trade today, expected to be between 1.1585 and 1.1625.”

ING is not convinced that ranges will break in the near term; “EUR/USD is hovering around 1.160, a level that, in our view, can work as an anchor again today and possibly for a few more days should US CPI fail to add much to the dollar narrative.”

ING maintains a year-end EUR/USD target of 1.20.

Energy prices will be important with Brent jumping close to 5% on Thursday and posting a 2-week high as the US targeted Russian oil companies.

Danske Bank commented; “In the Ukraine war, the US hit Russia with sanctions on Rosneft and Lukoil, two of Russia's largest oil companies.”

There were also reports that China would suspend Russian seaborne oil purchases.

Danske added; “Oil prices rose immediately following the announcement. This move is adding fuel to the fire and comes just after the EU approving the 19th package of sanctions, which include a ban on Russian liquefied natural gas imports.”

The US data releases will be a key element late in the week, especially given that the government shutdown has prevented the release of most official data.

The latest inflation data, as well as the PMI business confidence data will be released on Friday.

Within the PMI data, the headline figures as well as evidence of prices and jobs will be scrutinised closely.

Markets remain extremely confident that the Fed will cut rates this month with over a 90% chance of a further move in December.

According to Danske; “With two Fed cuts already fully priced - leaving limited room for further dovish repricing - we think the balance of risks remains tilted toward a tactically stronger USD.”

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TAGS: Euro Dollar Forecasts