The EUR to USD exchange rate is currently bearish, with the euro under pressure at recent lows.
Key drivers include the expected decline in interest rates from the Federal Reserve, which may weaken the USD. Additionally, escalating geopolitical tensions and economic instability in the Eurozone, influenced by ongoing effects from the war in Ukraine, continue to impact the euro negatively. Oil prices, trading at highs, could also reflect broader market trends affecting the euro, further complicating its positioning.
The near-term trading range is expected to remain stable, reflecting a tight band as both currencies contend with macroeconomic pressures.
Upside risk could arise from a stronger-than-expected economic recovery in the Eurozone, potentially boosting the euro's appeal. Conversely, a sharper decline in USD interest rates might accelerate the downward trend for the euro, leading to increased volatility in the currency pair.