May 28, 2025 – Written by David Woodsmith

STORY LINK Euro to US Dollar Forecast: EUR/USD Finds Support Near 1.1300

The Euro to Dollar exchange rate (EUR/USD) was unable to make headway on Tuesday and dipped to test the 1.1300 level before a recovery to 1.1335 on Wednesday.

US data was a net positive and Wall Street posted strong gains, but longer-term doubts remain a key element.

According to ING; “If US data and Trump continue to deliver positive surprises this week, a decisive break lower is possible.”

The bank is, however, sceptical that this scenario will play out; “For now, we see 1.130 as a likely anchor, with upside risks for EUR/USD still dominant in the weeks ahead.”

Scotiabank noted; “Near-term support is expected around 1.1280 and near-term resistance is expected around 1.1420.”

Multiple dollar elements have continued to reverberate within global markets.

The US consumer confidence data recorded a strong rebound for May with a jump to 98.0 from 85.7 the previous month and well above expectations of 87.1.

According to the survey, de-escalation on US trade tariffs was a key element boosting confidence, but the frequent policy shifts are masking a lack of overall progress.

HSBC noted; “the reality is that not much is changing. Trade talks are ongoing but not yielding public breakthroughs. US monetary policy is on hold.”

There are also still concerns that underlying confidence has been damaged.

Scotiabank commented; “Although President Trump has stepped back again from the precipice of aggressive tariff action, the rather capricious appearance of policymaking may undermine global investors’ confidence in US markets at a time when the erosion of free trade, concerns over fiscal policy and the administration’s relations with the Fed are already proving challenging for investor sentiment.”

According to Danske Bank; “The Trump administration’s late-week reversal on EU tariff threats reinforces our view that broad-based US tariffs are structurally negative for the USD.”

It added While large fiscal deficits supported growth and the USD in the post-Covid period, today’s deficits – set against a more fragile global backdrop – are fuelling concerns about long-term sustainability and increased reliance on foreign capital.

MUFG takes a similar view; “We remain in the camp of “damage done” and hence continue to expect weaker economic activity ahead given the likely curtailment of business and household decision-making.”

The longer-term dollar and Euro outlook also remains a key element.

Danske added; “Markets continue to reassess the “US exceptionalism” narrative that previously underpinned USD strength.”

According to Pepperstone head of research Chris Weston; “In a way, all roads have led to a weaker USD. Higher perceived U.S. deficits have raised concerns about increased future Treasury issuance, pushing up term premium and seeing people migrate away from the USD.”

This week, ECB President Lagarde has made the case for a stronger global role for the Euro.

According to Lagarde; “The ongoing changes create the opening for a ‘global euro moment.”

She added; “The euro will not gain influence by default – it will have to earn it.”

ING commented; “If European policymakers continue to push the idea, we could see strategic long positions in the euro build even faster. Lagarde’s enthusiasm is understandable; a stronger, more global euro supports bond market stability and keeps rates lower, while nominal appreciation helps cap inflation.”

It did, however, add; “exporters are already voicing concerns about the strong euro, and national governments, especially those with stronger finances, may be less keen, as they already enjoy low borrowing costs.”

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TAGS: Euro Dollar Forecasts