The current market bias for the USD to EUR exchange rate is bearish.
The key drivers influencing this trend are:
- Interest rate expectations indicate three rate cuts by the Federal Reserve, which are likely to weaken the USD.
- Global economic growth is improving, which could enhance demand for the EUR.
- The eurozone's GDP is projected to grow, benefiting from fiscal measures and military spending.
In the near term, the trading range is expected to hold steady, suggesting limited volatility for the USD against the EUR.
Upside risks include stronger-than-expected economic data from the U.S. that could support the dollar, while downside risks could arise from escalating geopolitical tensions in the Eurozone, which may negatively affect the euro.
Recent price data indicates the USD trades at approximately 0.8528 against the EUR, just below its three-month average, reflecting relative stability. Additionally, oil prices have trended lower, which could impact the euro’s performance due to its link to energy costs.