– Written by


Frank Davies

STORY LINK Euro to Dollar Forecast: 1.1780 in Focus as Buyers Push Higher

The Euro to Dollar (EUR/USD) exchange rate has turned more bullish this week, rising to two-week highs near 1.1730 before consolidating just above 1.17. The move comes amid a softer US Dollar as traders see a September Federal Reserve rate cut as almost certain, political uncertainty in Washington, and improving short-term technical momentum for the euro.

Analysts agree that a sustained break above 1.1780 could mark a turning point, opening the way for a retest of July’s 45-month high at 1.1830 and potentially sparking fresh talk of gains towards the 1.20 level.

According to UoB, “Upward momentum is starting to build again, but at this time, it is not enough to suggest a sustained rise.” The bank added that a move above 1.1780 would be a “potential game-changer” for the pair.

Scotiabank observed that “the EUR’s latest gains have delivered a near full retracement of the decline from late July and the EUR is once again threatening fresh multi-year highs.”

EUR/USD posted a 45-month high of 1.1830 at the start of July. Scotiabank sees a near-term range “between 1.1650 support and 1.1750 resistance.”

Markets remain confident that the Fed will act next month, with futures pricing close to a 95% probability of a September cut. ING noted that disinflation pressure will persist: “With the jobs market not looking as solid as it did earlier in the year and consensus GDP growth forecasts having been cut from 2.5% at the beginning of this year down to 1.5% we believe the Fed will cut the policy rate in September and follow up with additional 25bp cuts in October and December.”

US Treasury Secretary Bessent has stepped up calls for a 50-basis point cut in September, arguing that rates should be in a 2.75-3.00% range from the current 4.50%.

Bloomberg also reported remarks from E.J. Antoni — whom President Trump plans to nominate as the next Bureau of Labor Statistics Commissioner — suggesting monthly jobs data be replaced with quarterly releases. The comments, made before his nomination, have raised concerns over data transparency and the administration’s stance, particularly with Trump continuing his attacks on the Fed and its chair.

Scotiabank noted: “USD selling pressure had abated until President Trump repeated his criticism of Fed Chair Powell and suggested that he might allow a ‘lawsuit’ against Powell to proceed.”

Commerzbank’s Michael Pfister warned of uncomfortable parallels: “Increasingly this carries echoes of autocratic countries, where the heads of statistics agencies or central banks are being replaced. In these countries, critical data series are often discontinued and then reinstated a few months later after the ‘problems’ have supposedly been corrected, with significantly better values.”

He added: “I’m not saying that this will necessarily happen here. But the developments of the last few days and weeks do not exactly fill me with optimism about the future – or the US dollar.”

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TAGS: Euro Dollar Forecasts

– Written by


Frank Davies

STORY LINK GBP/USD Forecast: Pound Sterling Softens on Robust US PPI

The Pound to US Dollar (GBP/USD) exchange rate stumbled on Thursday, bringing the pairing’s recent bullish run to an end.

At the time of writing, GBP/USD was hovering near $1.3552, down around 0.2% from Thursday’s opening level.

The US Dollar (USD) trended broadly higher on Thursday, following the release of the latest US producer price inflation figures.

July’s PPI figures outpaced expectations, reporting factory input costs rose 3.3% year-on-year, comfortably above the 2.5% forecast.

The stronger-than-anticipated inflation reading lifted USD as it prompted some traders to dial back expectations for a 50bps interest rate cut from the Federal Reserve next month.

This built on earlier gains for the US Dollar as investors favoured the safe-haven asset ahead of the meeting between US President Donald Trump and Russian President Vladimir Putin.

Although Sterling slipped against the US Dollar, it posted gains versus most other major currencies on Thursday following the release of the UK’s latest GDP figures.

The Office for National Statistics (ONS) reported that the UK economy grew 0.3% in the second quarter, slower than the 0.7% growth in Q1 but comfortably above the 0.1% increase forecast.

Growth in June alone was particularly strong, coming in at 0.4% month-on-month.

The upbeat GDP data helped reinforce hawkish expectations for the Bank of England (BoE), easing pressure on policymakers to speed up rate cuts.

Even so, analysts warned that this solid performance is unlikely to spare the government from introducing fresh tax rises in the autumn budget – a concern that kept Sterling’s rally in check.

Towards the end of the week, GBP/USD movement is likely to be shaped by the latest round of US economic releases due on Friday.

US retail sales figures will be watched closely, with any signs of resilient consumer activity likely to buoy the Dollar.

Shortly after, the University of Michigan’s consumer sentiment index will be published, with forecasts pointing to another improvement in morale, potentially lending further upside to the ‘Greenback’.

Meanwhile, Sterling’s performance may hinge on broader market sentiment. If investors remain risk-averse ahead of the Trump–Putin meeting in Alaska, the Pound could face additional pressure against the US Dollar.

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TAGS: Pound Dollar Forecasts