The EUR/USD pair remains under pressure following a series of strong US macroeconomic releases and rising demand for the US dollar as a safe-haven asset. Recent US inflation data came in above expectations, reducing the likelihood of near-term Fed rate cuts and supporting US Treasury yields. Against this backdrop, the dollar has strengthened for several consecutive sessions, while the DXY index has reached fresh local highs for May.
Fed vs ECB: the market favors the dollar again
The key driver behind EUR/USD weakness is the shift in monetary policy expectations. Markets are gradually moving away from the scenario of aggressive Fed easing, while the eurozone economy remains fragile, particularly Germany’s industrial sector. Despite occasional hawkish signals from the ECB, investors doubt the regulator will be able to maintain a tight stance for long amid slowing growth and recession risks. Analysts note that the policy divergence between the Fed and the ECB is once again tilting in favor of the dollar.
Geopolitics and oil add to volatility
Additional pressure on the euro comes from geopolitical tensions in the Middle East and rising energy prices. This is especially sensitive for Europe, where higher oil and gas prices worsen both inflationary and economic prospects. Risk-off sentiment has intensified across markets, with investors reducing exposure to risk assets and returning to dollar-denominated instruments. This continues to limit EUR/USD recovery potential even during periods of temporary dollar weakness.
What’s next for EUR/USD
In the short term, the market remains bearish on EUR/USD. As long as US economic data stays resilient and the Fed maintains a cautious stance on rate cuts, pressure on the euro is likely to persist. The market’s immediate focus will be on upcoming US inflation figures, comments from Fed officials, and signals from the ECB ahead of its next meetings.
If current conditions remain unchanged, market participants see room for a further decline toward the 1.1600–1.1550 area, while rebounds toward 1.1650–1.1670 may continue to attract selling interest. As I warned earlier in the article EUR/USD holds above 1.1700 as pressure builds, the lack of bullish momentum ultimately triggered long liquidation.
Latest EUR/USD News
-
Afghanistan
-
Albania
-
Algeria
-
Angola
-
Argentina
-
Armenia
-
Australia
-
Austria
-
Azerbaijan
-
Bahamas
-
Bahrain
-
Bangladesh
-
Belarus
-
Belgium
-
Bolivia
-
Botswana
-
Brazil
-
Brunei
-
Bulgaria
-
Cambodia
-
Cameroon
-
Canada
-
Chile
-
China
-
Colombia
-
Congo
-
Costa Rica
-
Cote d'Ivoire
-
Croatia
-
Cuba
-
Cyprus
-
Czechia
-
DR Congo
-
Denmark
-
Dominican Republic
-
Ecuador
-
Egypt
-
El Salvador
-
Estonia
-
Eswatini
-
Ethiopia
-
Finland
-
France
-
Georgia
-
Germany
-
Ghana
-
Greece
-
Haiti
-
Hong Kong
-
Hungary
-
India
-
Indonesia
-
Iran, Islamic republic
-
Iraq
-
Ireland
-
Israel
-
Italy
-
Jamaica
-
Japan
-
Jordan
-
Kazakhstan
-
Kenya
-
Korea
-
Kuwait
-
Kyrgyzstan
-
Laos
-
Latvia
-
Lebanon
-
Lesotho
-
Libya
-
Lithuania
-
Luxembourg
-
Madagascar
-
Malaysia
-
Malta
-
Mauritius
-
Mexico
-
Moldova
-
Mongolia
-
Montenegro
-
Morocco
-
Mozambique
-
Myanmar
-
Namibia
-
Nepal
-
Netherlands
-
New Zealand
-
Nigeria
-
North Macedonia
-
Norway
-
Oman
-
Pakistan
-
Palestine
-
Panama
-
Papua New Guinea
-
Paraguay
-
Peru
-
Philippines
-
Poland
-
Portugal
-
Puerto Rico
-
Qatar
-
Reunion
-
Romania
-
Rwanda
-
Saudi Arabia
-
Serbia
-
Singapore
-
Slovakia
-
Slovenia
-
Somalia
-
South Africa
-
Spain
-
Sri Lanka
-
Sweden
-
Switzerland
-
Syria
-
Taiwan
-
Tajikistan
-
Tanzania
-
Thailand
-
Trinidad and Tobago
-
Tunisia
-
Turkey
-
UAE
-
Uganda
-
Ukraine
-
United Kingdom
-
United States
-
Uruguay
-
Uzbekistan
-
Venezuela
-
Vietnam
-
Yemen
-
Zambia
-
Zimbabwe
- Forex
- Crypto
