|

EUR/USD stabilizes near 1.1720 as US Dollar eases after UoM survey

  • EUR/USD rebounds from intraday lows near 1.1700 but remains under pressure.
  • UoM Consumer Sentiment drops to 55.4, missing estimates and marking a four-month low.
  • Russia and Belarus launched the Zapad-2025 military drills on Friday, prompting Poland to close border crossings with Belarus.

The Euro (EUR) trades on the back foot against the US Dollar (USD) on Friday, with EUR/USD hovering around 1.1720, stabilizing after dipping to intraday lows near 1.1700.

The mild recovery comes as the Greenback eases from session highs after the University of Michigan’s preliminary September survey revealed weakening consumer confidence alongside sticky inflation expectations.

The headline Consumer Sentiment Index fell to 55.4 in September, down from 58.2 in August and missing the market forecast of 58, marking the weakest reading since May. The Consumer Expectations Index slipped to 51.8 from 55.9, undershooting expectations of 54.9, while the Current Conditions gauge eased to 61.2 from 61.7.

On the inflation front, the one-year outlook remained unchanged at 4.8%, but the five-year measure climbed to 3.9% from 3.5%, highlighting persistent long-term price concerns. The data reinforced the view that US households are increasingly worried about the economic outlook, even as inflation expectations stay uncomfortably high.

The US Dollar Index (DXY), which measures the Greenback against a basket of six major currencies, trades near 97.67, retreating from an intraday high of 97.86. While off its peak, the index remains broadly firm, keeping the Euro’s recovery attempts limited.

Across the Atlantic, the Euro faces its own set of challenges. The European Central Bank (ECB) left rates unchanged on Thursday, with policymakers striking a cautious tone amid stagnant growth and softening inflation.

At the same time, the security environment in Eastern Europe has deteriorated after around 19 Russian drones entered Polish airspace earlier in the week, while on Friday, Moscow and Minsk launched the large-scale Zapad-2025 joint military exercises. In response, Poland closed border crossings with Belarus and deployed roughly 40,000 additional troops to its eastern frontier.

Author

Vishal Chaturvedi

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

More from Vishal Chaturvedi
Share:

Editor's Picks

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD stays offered just above 1.1400

EUR/USD keeps the downtrend well in place for yet another day, challenging the 1.1400 contention zone on Tuesday. The continuation of the selling impulse in spot comes amid decent gains in the US Dollar, which continues to find support in the persistent effervescence surrounding the US-Iran crisis.

Middle East crisis intensifies, Gold up

Gold now seems to have embarked on a consolidative phase below the key $4,100 mark per troy ounce in the latter part of Tuesday’s session. Meanwhile, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP rebounds on rising on-chain activity
Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).
The Iranian war has again risen
The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.
US Dollar mid-year outlook: Exceptional currency, exceptional risks?
The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.