The euro’s performance in 2025 has surprised many. After starting the year mixed, EUR/USD has climbed, leaving businesses questioning the next move.
With ECB policy on pause, likely Fed cuts, and shifting capital, the question is : will the euro go up — or keep falling?
Euro Forecast 2025: Key Points
- Short term: Euro tone is firm above 1.16.
- ECB policy: Deposit rate sits at 2.00% after June’s cut. Hold likely.
- Inflation: Euro area inflation stands at 2.0% in July.
- Market pricing: Economists now lean toward no change until December.
- EUR now: EUR/USD ~1.1688–1.17; EUR/GBP ~0.86–0.867.
- Best time to buy EUR? Rates are improved for USD payers. Q4 swings likely.
- Longer view: Supportive if the Fed eases faster. Albeit tariffs are a headwind.
Where Is the Euro Now? (Mid-August Snapshot)
- EUR/USD level: Around 1.1688–1.1701 on August 15. European Central Bank
- Year-to-date move: Euro is up about 13% versus USD in 2025. Exchange Rates
- Inflation: Euro area HICP flash shows 2.0% in July. Germany is 2.0%. European Commission, Statistisches Bundesamt
- ECB stance: Rates held on July 24; deposit at 2.00%. European Central Bank
- Activity pulse: Services PMI rose to 51.2; manufacturing near 49.8. Reuters, Trading Economics
- Trade-weighted euro: Near record highs in July on NEER gauges. Trading Economics
Will the Euro Go Up?
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Why the Euro Is Firm in 2025
1) Policy rates now look stable
The ECB cut in June, then paused in July. Markets see another cut as unlikely before December. Accordingly, carry dynamics are steady for now. European Central Bank
2) Inflation sits at target
Price growth has cooled to the 2% goal. Also, wage gains are easing. That reduces pressure for urgent moves. European Commission
3) Fed debate supports EUR
Investors discuss a larger Fed cut in September. Afterwards, the path may slow. Rate gap narrowing can favour the euro. Business Insider
4) External backdrop is mixed
A 15% U.S. tariff on EU goods is a headwind. Albeit, euro strength persists on stable policy and flows. Reuters
What’s Next for EUR?
We see EUR/USD holding a higher range into autumn. Additionally, EUR/GBP may stay supported while the BoE moves cautiously. The BoE cut to 4.0% on August 7, then turned more data-led. Chatham Financial
Technical read, simplified: The euro is up solidly year-to-date. Pullbacks toward 1.15–1.16 may find buyers. Afterwards, 1.18–1.20 could cap near term.
When Could the Euro Push Higher Again?
A push could come if:
- The Fed signals a slower path after September. Business Insider
- Euro area data stays near current levels. Reuters
- Tariff risks fade into year-end. Reuters
Is It a Good Time to Buy EUR?
- For importers paying in euros: Rates are favourable versus early 2025. Hedge staged amounts into Q4.
- For exporters invoicing in euros: Keep pricing flexible. Also, consider collars to protect margin.
- For property purchases or transfers: Pre-book tranches. Additionally, add rate alerts to time dips.
- For investors with USD assets: A stronger euro lifts overseas returns in euro terms.
Plan Your EUR Strategy
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EUR/GBP – Why the Cross Is Steady
The pound cut cycle started, then paused debate resumed. EUR/GBP trades near 0.86–0.867 this week. Accordingly, modest euro support remains while the BoE re-assesses. Chatham Financial, Yahoo Finance
Our take:
- Q3 target: 0.86–0.88
- Longer range: 0.84–0.89
Euro Strength vs. Euro Weakness
| Factors supporting EUR | Factors pressuring EUR |
|---|---|
| Fed easing narrows rate gaps | U.S. tariffs on EU goods |
| Inflation at target offers stability | Slower global trade flows |
| Trade-weighted gains draw flows | Event risk into Q4 |
Will the Euro Go Up?
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FAQ: Euro Outlook in 2025
Will the euro go up in 2025?
A gradual grind higher is possible. Although path depends on the Fed. Business Insider
Why is the euro stronger in 2025?
Inflation is at target. The ECB is steady. Also, the Fed may ease. European Commission, European Central Bank, Business Insider
Is it a good time to buy euros?
For near-term needs, yes. Hedge in stages before Q4 swings.
When will the euro rise again?
Afterward, late Q3 or early Q4 looks plausible. That assumes the Fed slows.
Where is EUR/GBP likely to trade?
We see 0.84–0.89 over coming months. BoE policy will guide drift. Chatham Financial
Euro Forecast 2025: Core View
| Quarter | Expected trend | Range forecast |
|---|---|---|
| Q3 2025 | Sideways / mildly bullish | EUR/USD 1.15–1.20 |
| Q4 2025 | Bullish if Fed eases | EUR/USD 1.14–1.21 |
| Full year | Higher versus USD | EUR/USD average near 1.16–1.18 |
Our view: Euro firmness likely extends into Q4. Additionally, dips should attract hedging demand. Afterwards, tariffs and global shocks remain wildcards. Reuters
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