Euro to Dollar Forecast: EUR/USD Slides Below 1.15 as Fed Uncertainty Lingers

Modified: Tuesday, 4 November 2025 22:15 BST - Written by Ben Hughes

STORY LINK Euro to Dollar Forecast: EUR/USD Slides Below 1.15 as Fed Uncertainty Lingers

The Euro to Dollar (EUR/USD) exchange rate fell to fresh three-month lows below 1.1500 on Tuesday, as a strong US Dollar extended its advance amid renewed risk aversion and persistent concerns over tightening global liquidity.

EUR/USD Forecasts: Fresh 3-Month Lows

The dollar has maintained a firm tone against the Pound and Euro in global markets with the Euro to Dollar (EUR/USD) exchange rate dipping to fresh 3-month lows below the 1.1500 level.

There has been a significant setback for equities which hampered the Euro to some extent.

There are also concerns over tighter liquidity conditions which will continue to support the US currency; According to Credit Agricole; “Persistent USD liquidity premium could add to the costs of short-USD hedges and its rate advantage across the board in the near term.”

According to UoB further losses may be limited; “While positive divergence is still apparent, EUR may just have enough momentum to test 1.1490 today before the risk of a recovery increases.”

It added; “We remain optimistic on a rally into year-end to 1.18-1.20, but until US data gives the go-ahead for a rebound, there aren’t other obvious bullish drivers for EUR/USD.”

Overall interest rate trends will remain a key influence, but there is still a high degree of uncertainty over the US outlook.

According to Scotiabank; “It is probably helping the USD and not helping risk sentiment that a cloud of uncertainty has descended over the Fed policy outlook.”

The latest US data suggested that manufacturing remained in contraction territory for October.

ING commented; “The ISM manufacturing index suggests that the US industrial sector remains under pressure from weak growth and tariff-related uncertainty. The one consolation is that inflation pressures appear to be easing, but the Fed hawks will want to see broader evidence of this before backing a December rate cut.”

The latest ADP private payrolls data is due on Wednesday with the data watched closely after a reported payrolls decline of 32,000 last month. Consensus forecasts are for an October increase of around 30,000.

ING commented; “Our short-term fair value model is now showing a 1% undervaluation, and with positioning now much more balanced, the pair can enjoy faster rallies on poor US jobs market news.”

Commerzbank's FX analyst Michael Pfister noted the divisions within the central bank, but added; “The more dovish members seem to sense an opportunity to take a more dominant stance at the moment.”

According to Pfister; “Therefore, we are less certain than the market that interest rate cuts have really become less likely in the coming year after Jerome Powell's rather hawkish press conference last week, and whether the USD's strength in recent weeks is really justified."

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TAGS: Euro Dollar Forecasts