EUR/USD Dips: Is This Just a Correction or the Start of a Dollar Dominance You Can’t Afford to Ignore?
Is the Euro’s recent stumble just a bump on the road or the start of a deeper correction? As the EUR/USD pair slides from its one-week vault above 1.1700 to a more modest 1.1640 ahead of Friday’s US session, the US Dollar is flexing its muscles again. Why the sudden vigor? Well, whispers about Fed Governor Christopher Waller potentially ascending as the next Fed Chair have rattled markets. Waller—not just a name tossed around lightly—carries weight, having been appointed by Trump and known for his dovish leanings. But here’s the kicker: despite his tilt for lower rates, financial circles respect him, and it’s unlikely his chairmanship would rattle the Fed’s reputation. Meanwhile, Stephen Miran’s name is buzzing as Trump’s pick for the Fed’s board, signaling potential moves toward easier money policy. On the economic front, US Jobless Claims are ticking up beyond expectations, and Atlanta Fed’s Raphael Bostic puts a damper on hopes for a September rate cut, warning on tariffs’ inflationary impact. And let’s not forget EUR/USD’s stubborn resistance at 1.1700—bulls have hit a wall but the week’s gains aren’t quite out the window yet. With all these forces swirling, the question remains: Is the Euro just catching its breath, or is a bigger shift brewing? Ready to dive deeper? LEARN MORE
- The Euro retreats from weekly highs, and the US Dollar picks up on speculation that Governor Waller might be the next Fed Chair.
- Fed Bostic warned about the impact of tariffs and cooled hopes of a September rate cut.
- EUR/USD found resistance at 1.1700 and is correcting lower.
The EUR/USD pair slides from one-week highs right above 1.1700, trading at 1.1640 ahead of the US session opening on Friday, as the US Dollar bounces up on the back of news mentioning Christopher Waller as a top candidate to replace Jerome Powell as the Federal Reserve (Fed) Chairman.
Bloomberg reported on Thursday that the members of US President Donald Trump’s team were impressed after a meeting with the Fed Governor Christopher Waller, although he had not met the president yet.
Waller was appointed by Trump to the bank’s Board during his first term. He has been a notorious voice for lower interest rates recently, but he is a highly respected figure in financial circles, and his appointment is not expected to damage the central bank’s credibility.
Meanwhile, the name of Stephen Miran, chair of the Council of Economic Advisors, sounds like Trump’s favourite candidate to serve on the central bank’s board until January in the seat vacated by Governor Adriana Kugler. Miran will almost certainly have a vote at the September, October, and December meetings, and his choice is seen as a maneuver to pursue Trump’s desires of an easier monetary policy.
On the macroeconomic front, data released on Thursday showed that U.S. Jobless Claims increased above expectations last week. Atlanta Fed President Raphael Bostic acknowledged the growing risks for the US labour market, but he said that it is too soon to commit to a rate cut in September.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.30% | 0.03% | 0.37% | -0.11% | 0.03% | -0.06% | 0.27% | |
| EUR | -0.30% | -0.23% | 0.12% | -0.37% | -0.23% | -0.25% | -0.01% | |
| GBP | -0.03% | 0.23% | 0.36% | -0.14% | -0.09% | 0.11% | 0.15% | |
| JPY | -0.37% | -0.12% | -0.36% | -0.46% | -0.40% | -0.39% | -0.07% | |
| CAD | 0.11% | 0.37% | 0.14% | 0.46% | 0.16% | 0.22% | 0.34% | |
| AUD | -0.03% | 0.23% | 0.09% | 0.40% | -0.16% | 0.07% | 0.17% | |
| NZD | 0.06% | 0.25% | -0.11% | 0.39% | -0.22% | -0.07% | 0.18% | |
| CHF | -0.27% | 0.01% | -0.15% | 0.07% | -0.34% | -0.17% | -0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: US Dollar upside attempts remain limited with the Fed on Focus
- The Dollar has ticked up from lows, but investors remain wary of placing large US Dollar bets amid the uncertainty about the next Fed head and amid recent data pointing to the softening of the labour market. which adds pressure on the central bank to cut interest rates.
- US Jobless Claims increased to 226,000 in the last week of July, according to data from the US Department of Labor. These figures exceed the 221,000 forecasted by market analysts, following a 218,000 reading in the previous week.
- Also on Thursday, Q2 Nonfarm Productivity data showed a weaker-than-expected 2.4% rise, while Unit Labour Costs increased 1.6%, slightly above the 1.5% expected, but still at levels considered moderate.
- Fed’s Bostic held a cautious tone in a virtual panel organized by the Florida Institute of CFOs, warning about the inflationary impact of tariffs and forecasting only one rate cut in the second half of 2025.
- News that Trump will meet Russian President Putin next week is feeding hopes of a peace deal in Ukraine, which has provided additional support to the Euro over the last few sessions.
- The calendar is thin on Friday with only a speech by the St. Louis Fed President, Alberto Mussalem, worth mentioning during the American session.
Technical Analysis: EUR/USD bulls met resistance at 1.1700
EUR/USD found resistance at 1.1700 on Thursday before trimming some gains, but is still on track for a 0.5% weekly gain. The 4-hour Relative Strength Index (RSI) is turning lower but still within bullish levels, while the MACD is crossing below the signal line, suggesting a further correction on Friday.
Support at the 1.1595-1.1610 area (Thursday’s low, August 3 and 5 highs) is expected to defend the immediate bullish trend. Further down, the next targets would be the August 5 low at around 1.1530 and the July 31 high at 1.1460.
On the upside, the area between 1.1700-1.1710, where the 78.6% Fibonacci retracement of the late-July sell-off meets July 23 and 25 lows, and the trendline resistance now at 1.1745, is likely to pose a significant challenge for bulls. Further up, the July 24 high at 1.1790 would come into focus.
Euro FAQs
The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
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