The EURUSD rate serves as an indicator that compares the US and EU economies. If the US economy steadily grows and the EU faces problems, the EURUSD rate may drop. Conversely, if America’s growth rate declines and the eurozone thrives, the EURUSD will increase. There are many currency exchange vendors, ranging from traditional bricks-and-mortar banks to online neobanks.
By comparison, the ECB’s three rate hikes to 2% makes the euro less attractive to investors. The projected rates of inflation have presented mixed euro-to-dollar forecasts. Consumer Price Index figures, has provided salvation to the euro versus the U.S. dollar.
Analysts’ EUR/USD Price Predictions for 2025
This enables the comparison between the average forecast price and the effective close price. Long-term forecasts are shaped by current prevailing economic conditions, and these can be revised subject to new market-moving information. On a yearly basis, the Producer Price Index (PPI) rose 1.7% in August in the US, down from 2.1% in July and below the market expectation of 1.8%.
What influences the EUR to USD exchange rate?
BNP Paribas said that EURUSD has underperformed their expectations over the past month following the ECB’s September meeting, in its October edition of Markets 360. The interview served as a reminder that the US Treasury under Trump’s time in office branded China a currency manipulator, even though the formal criteria had not been fulfilled. This week’s Bloomberg interview has therefore raised the prospect that a victory for Trump in November could re-introduce the wild card of weak dollar policy from the White House. Perhaps the biggest story this quarter, however, is what a Donald Trump presidency would mean for Eur/Usd. It’s widely agreed upon that a Trump government will likely implement looser fiscal policy, a steeper US yield curve, and stronger currency. The foreign exchange aspect remains uncertain and has been further complicated in the beginning of the quarter by former President Trump’s remarks to Bloomberg, whereby he disparaged the weak Japanese yen and Chinese yuan.
Bullish Euro to Dollar Forecast 2024
Supply closures from Hurricane Francine which is ravaging the Gulf of Mexico are another bullish factor. WTI is forming short-term bullish reversal patterns on the daily and weekly charts. Gold preserves its bullish momentum and trades near $2,580 after setting a new record-high slightly above this level. The beaxy exchange review 10-year US Treasury bond yield stays in the red below 3.7% as markets reassess the odds of a large Fed rate cut, helping XAU/USD push higher. Midway through December, the EUR/USD traded back up to around the $1.06 level due to a weaker dollar and declining US Treasury yields. The ECB increased interest rates by 50 basis points (bps) as anticipated on December 15, reiterating that more hikes will follow, and outlining plans for quantitative tightening.
By displaying three central tendency measures (mean, median, and mode), you can know if the average forecast is being skewed by any outlier among the poll participants. Europe also faces a greater chance of plunging into a recession, according to Capital Economics. The London-based consulting firm estimates a 1% growth rate in Europe compared to 2% in the U.S. The US economic calendar will feature the University of Michigan’s Consumer Sentiment Survey for September, which is unlikely to influence the USD’s valuation.
According to these forecasts, the EUR/USD exchange rate is likely to experience notable changes driven by various economic and financial dynamics. So, if you look at the price chart, you will notice the price repeats its actions over the long term. For short-term trades, you should check fundamental factors that usually affect the EUR/USD rate. Bank of America’s 2024 Euro to Dollar dowmarkets forecasts confirm it is more bearish on the U.S. Dollar than the consensus, with analysts saying Federal Reserve interest rate cuts “matter more for the market” than cuts at other central banks.
Looking back, it is clear that the movement of the EURUSD pair follows specific patterns. It is important for investors to be able to recognize trends in the main economic indicators of the eurozone and the United States and to understand the impact of interest rates and the actions of central banks. This will help to identify the long-term direction of the asset movement, which can be followed when trading in financial markets. Understanding historical trends and major events is crucial for forex traders.
While historical trends and technical analysis offer valuable insights, the future trajectory of the currency pair remains subject to significant uncertainty. The Forecast Poll is a sentiment tool that highlights near and medium-term price expectations from leading market experts. It is a sentiment indicator which delivers actionable price levels, not merely “mood” or “positioning” indications. Traders can check if there is unanimity among the surveyed experts – if there is excessive speculator sentiment driving a market – or if there are divergences among them. When sentiment is not at extremes, traders get actionable price targets to trade upon.
After a retest of the line as support, the price could advance at around the 1,2200 levels. Together with the close price, this chart displays the minimum and maximum forecast prices collected among individual participants. The result is a price corridor, usually enveloping the weekly close price from above and below, and serves as a measure of volatility. With one month left in 2022 and a reduced likelihood of further hawkish ECB intervention until 2023, it’s highly unlikely euro losses will be meaningfully recouped. As of Nov. 17, Wallet Investor predicts a closing rate of 1.037 for December. The Economy Forecast Agency, an online prediction service, is less optimistic, citing a euro December close at 0.964.
It is important to remember that this is not yet a typical rate-cutting cycle in the eurozone. In the past, easing cycles had always been triggered by recessions or crises. In fact, the ECB must find a balance between potential reputational damage and rising concerns about an overly optimistic inflation forecast. The release of fresh data on the US and Eurozone economies is required to end sideways movement and form a new long-term trend, allowing traders to invest in the EURUSD pair. In September 2024, investors expect the US Federal Reserve to cut the interest rate by 25 bp. If the reaction is clear, a new trend will form, showing if investing in the EURUSD pair could be profitable.
- It’s also about the underlying central bank and economic fundamental stories that can make or break FX rallies in the many risk-on/dollar-off windows they expect to see this summer.
- These events led to the formation of a sideways trend in which the asset is still trading.
- This will likely further strengthen the euro, causing existing euro dollar forecasts to be revised.
- Traders analyze its future price not only for trading purposes but also to gauge the economic conditions of the EU and the US, along with the global market sentiment.
- If the Democratic Party candidate wins, the US dollar will likely continue to strengthen.
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As of Nov. 17, the Al Pickup website projects a bullish long-term euro-to-dollar forecast, projecting price targets of 1.25 for January 2025 and 1.29 for January 2030. Wallet Investor is less optimistic, projecting a closing rate of 0.993 in January 2025 and 0.965 in January 2027. In contrast, the U.S. dollar has been greatly strengthened by its status as a counter-cyclical safe haven. It has become a choice for capital inflows seeking both safety and exposure to a hawkish Federal Reserve (Fed). As investors flee to safety amid economic and geopolitical uncertainty, a strengthened dollar has compounded the relative weakness of the euro and most other dollar-paired currencies.
Bulls again were aiming at 1.25, but the FOMC June projection broke the uptrend again. The Fed started talking about a potential federal funds rate hike in 2022, which encouraged investors to buy the US dollar. The more the economy heats, the more likely the central bank to phase out the quantitative easing program and hike the interest rates. As a result, the assets denominated in the local currency grow more attractively.