EUR/USD Forecast and News
Euro weakens against US Dollar amid Middle East tensions
EUR/USD faces some renewed downside pressure and retests the low 1.1500s in the latter part of Thursday’s NA session. The move lower in spot comes after two daily advances in a row and follows the fresh bid bias in the US Dollar amid the re-emergence of some effervescence in the Middle East. Moving forward, US NFP data will take centre stage on Friday.
Latest EUR News
EUR/USD Technical Overview
Kocher flags autumn data focus as geopolitical risks cloud Euro inflation
ECB's Kocher scores 5.6/10 on FXS Speechtracker, below the historic average of 6.3/10, pointing to a slightly less forceful tone than usual. The emphasis on how quickly geopolitical developments can alter energy prices and the inflation outlook highlights upside risks to Euro-area prices, which leans modestly hawkish despite the softer score.
The commitment that in autumn the ECB Governing Council will base decisions on incoming data to bring Euro-area inflation back to 2% on a sustainable basis reinforces a data-dependent but vigilant stance. Overall, the speech suggests a cautious hawkish bias, with Kocher keeping the door open to renewed tightening or a slower easing path if energy-driven inflation pressures re-emerge.
Fundamental Overview
EUR/USD extends its losses for the second consecutive day, trading around 1.1520 during the Asian hours on Friday. The currency pair faces downward pressure as the US Dollar (USD) gains strength, propelled by renewed safe-haven demand among global investors.
Escalating tensions in the Strait of Hormuz have rattled market stability and created significant skepticism regarding the reopening of this critical shipping route. Market caution remains elevated as Iran's parliament evaluates a draft proposal that seeks to prohibit US and Israeli vessels, levy a 20% cargo penalty on hostile nations, and maintain restrictions on the corridor until the US blockade is removed.
Adding to the market volatility, rising US Treasury yields and a rebound in crude oil prices have stoked fears that the Federal Reserve might implement another interest rate hike next month. Despite these inflationary signals, the CME FedWatch Tool currently reflects a 54.5% probability of a 25-basis-point rate increase in September, down from 63.4% last week. Investors and traders are now closely eyeing the upcoming July Nonfarm Payrolls (NFP) report to gauge the health of the labor market and better anticipate the Fed's monetary policy path.
Across the Atlantic, economic indicators in the Euro Area present a challenging backdrop. Eurozone Retail Sales unexpectedly contracted by 0.3% month-on-month in June, missing market projections for a 0.1% growth and almost completely unwinding May's revised 0.4% gain. On an annual basis, Retail Sales rose by merely 0.7%, the weakest performance since July 2024, falling short of the expected 1.0% expansion and decelerating sharply from May's 1.9% increase.
Furthermore, the recovery in oil prices could dampen hopes that declining energy costs would alleviate pressure on central banks to keep policy tight. Following the European Central Bank's (ECB) decision to hold interest rates steady at its most recent meeting, markets expect only one more ECB rate hike by the end of the year, alongside a roughly 40% chance of a second increase.
SPECIAL WEEKLY FORECAST
Interested in weekly EUR/USD forecast? Our experts make weekly updates forecasting the next possible moves of the Euro-US Dollar pair. Here you can find the most recent forecast by our market experts:
EUR/USD: US Dollar in trouble as Warsh chickens out
Latest EUR Analysis
Editors' picks
USD/JPY retreats below 158.50 as focus remains on US NFP
USD/JPY eases from weekly highs and trades below mid-158.00s in Asia on Friday, as the Japanese Yen shrugs off concerns about Japan's falling household spending and worsening fiscal condition amid the wide US-Japan rate gap. The US Dollar, on the other hand, benefits from geopolitical uncertainties, which could cap the pair's downside ahead of the US NFP report.
AUD/USD consolidates below 0.7050; looks to US NFP amid Iran risks
AUD/USD trades with caution below 0.7050 in the Asian session on Friday, as reviving safe-haven demand supports the US Dollar. Moreover, recovering oil prices fuel inflation fears, bolstering Fed rate-hike bets and pushing US Treasury bond yields. This further underpins the USD as the focus shifts to the US NFP report, due later today. The immediate focus is on Chinese trade data.
Gold finds fresh buyers to regain $4,250 ahead of US NFP
Gold is back on the bid above $4,250 in the Asian session on Friday, stalling the previous day's pullback from levels just above $4,300, or the highest since June 18. Geopolitical uncertainty amid the US-Iran standoff over the Strait of Hormuz lifted oil prices and revived inflation fears, bolstering Fed rate-hike bets and pushing US bond yields higher. This, in turn, supports the US Dollar, though Gold bears seem hesitant ahead of the crucial US NFP report.
US Dollar: NFP and inflation mix complicate Fed path
Markets question Fed's inflation resolve after July FOMC meeting
Majors
Cryptocurrencies
Signatures
Influential Institutions & People for the EUR/USD
The European Central Bank (ECB)
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone. With its beginnings in Germany in 1998, the ECB’s mandate is to maintain price stability in the Eurozone, so that the Euro’s (EUR) purchasing power is not eroded by inflation. As an entity independent of individual European Union countries and institutions, the ECB targets a year-on-year increase in consumer prices of 2% over the medium term. Another of its tasks is controlling the money supply. This involves, for instance, setting interest rates throughout the Eurozone. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde has been the President of the ECB since November 1, 2019. Her speeches, statements and comments are an important source of volatility, especially for the Euro and the currencies traded against the European currency.
ECB official website , on X and YouTubeThe Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website , on X and FacebookChristine Lagarde
Christine Lagarde was born in 1956 in Paris, France. Lagarde, who graduated from Paris West University Nanterre La Défense, became President of the European Central Bank (ECB) on November 1, 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund (IMF) between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007-2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005-2007).
Kevin Warsh
Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve in May 2026, for a four-year term ending in 2030. His term as a member of the Board of Governors will expire in May 2040. Warsh, born in Albany (New York) on April 13, 1970, is an American financier and attorney who already served as a member of the Fed Board of Governors from 2006 to 2011 and was significantly involved in the central bank's response to the financial crisis. Before that, he served as a special assistant to the president for economic policy and the executive secretary of the National Economic Council under President George W. Bush.
ECB NEWS & ANALYSIS
FED NEWS & ANALYSIS
About EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a term used t o describe the most important currency pairs in the world. This group also includes GBP/USD, USD/JPY, AUD/USD , USD/CHF, NZD/USD and USD/CAD . The popularity of the Euro Dollar pair stems from its representation of two of the world’s largest economies: the Eurozone and the United States.
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as “the Cable”, a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States. As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).