Euro to Dollar Price Forecast: EUR Retakes 1.15 as Iran Strikes US

June 23, 2025 - Written by James Fuller

STORY LINK Euro to Dollar Price Forecast: EUR Retakes 1.15 as Iran Strikes US

The US Dollar has posted net gains on Monday with increased Middle East tensions following the US move to attack Iran’s nuclear facilities over the weekend.

MUFG commented; “The latest developments in the Middle East will understandably dictate price action in financial markets at the start of this week.”

The Euro to Dollar (EUR/USD) exchange rate briefly regained the 1.15 level before a fresh retreat to 1.1460 and close to 10-day lows.

According to UoB; “there is a chance for EUR to test the 1.1445 support level. Based on the current momentum, the major support at 1.1400 is unlikely to come under threat.”

Scotiabank noted; “the bullish technical picture is softening as the multi-month sequence of higher lows and higher highs has been met with slowing momentum.”

It added; “We continue to note the importance of the 50 day MA support level at 1.1364. We look to near-term support expected around 1.1420 and look to resistance above 1.1520.”

According to ING; “markets lack conviction that this conflict will be prolonged or that the dollar has much to gain from that. Ultimately, it may still take some domestic macro event, especially in the US, to drive any substantial deviation from the 1.1450-1.1600 range.”


It added; “We have a slight preference for a return to 1.140 rather than another acceleration in the EUR/USD multi-month rally over the coming weeks. But we’ll have to play it by ear given the highly volatile geopolitical situation.”

HSBC commented; “the direction of exchange rates will come down to the oil price and how quickly it rises, subsequent de-risking pressures, and potential escalation. The DXY has been slightly stronger over the past week but in light of the latest developments, the currency could strengthen further, as its safe-haven properties work better.”

Energy prices and the scope for Iranian retaliation will, therefore, be a key short-term focus with the straits of Hormuz a key element.

Danske Bank commented; “If the Strait of Hormuz became non-navigable, it would constitute pretty much an unprecedented negative supply shock for the energy markets at least in recent history.”

At this stage, it considers the risk is relatively low and added; “In our view, closing the Strait of Hormuz is the last option that Iran would resort to as it would certainly provoke a strong US military response, and also because its domestic economy relies on it. However, desperate times lead to desperate action, and if the Supreme Leader Ali Khamenei felt that he had nothing to lose anymore, he might choose to go all in.”

Fed Chair Powell will testify to Congress this week following last week’s monetary policy decision.

ING commented on the central bank’s reluctance to shift to a dovish policy stance despite recent benign inflation data and added; “We’ll see how Powell defends those views (and the Fed’s independence) in congressional testimonies tomorrow and Wednesday.”


MUFG noted that there have been further dovish comments on interest rates from Fed Governor Waller.

Waller stated he doesn’t see a significant inflation threat from tariffs and backed an interest rate cut at the July meeting. He added; “If you’re starting to worry about the downside risk [to the] labor market, move now, don’t wait.”

The commentary could be especially pertinent as Waller has been touted as a possible Trump nominee to succeed Powell as Fed Chair and Trump has been pushing strongly for rate cuts.

MUFG commented; “It highlights that US dollar strength on the back of Middle East tensions and the Fed’s reluctance to cut rates are built on shaky foundations.

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TAGS: Euro Dollar Forecasts