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Euro Surges: Dollar Woes and Stable Inflation Fuel Rally
Euro’s Strong Advance
On June 30, 2025, the Euro climbed to $1.1776, a 0.51% gain, reaching its highest level since September 2021. This surge, largely driven by U.S. dollar weakness, overshadowed a flat German CPI, which held steady at 2% annually in June, signaling stable but unremarkable inflation. Eurozone CPI data, due Tuesday, is expected to echo this stability at 2.1%. For a Frankfurt exporter, the stronger Euro tightens margins on U.S. sales, yet it underscores confidence in the region’s economic resilience, despite a slight dip in Eurozone sentiment to 94 from 94.8.
U.S. Dollar Under Pressure
The U.S. Dollar Index fell 0.5% to 97.05, weakened by a disappointing Chicago PMI of 40.4, missing forecasts of 42.7. Hawkish remarks from Federal Reserve officials, projecting just one rate cut in 2025, failed to lift the greenback. President Trump’s public push for lower rates, coupled with trade policy uncertainty, further eroded dollar confidence, boosting EUR/USD.
Technical Outlook
EUR/USD held above 1.17, testing the 127.2% Fibonacci extension at 1.1710. Support lies at 1.1544, with resistance near 1.18. The Relative Strength Index nears overbought territory, suggesting possible consolidation, but a break above 1.18 could eye 1.20.
What’s Ahead?
Tuesday’s Eurozone CPI and Fed Chair Powell’s speech will shape the Euro’s path. Stable inflation could sustain its strength, but robust U.S. data or trade deal breakthroughs might cap gains. The Euro rides a wave of cautious optimism for now.
