Euro Falls as Italy Calls for Further Rate Cuts Amidst Strong Dollar

The Euro experienced a notable drop against the US Dollar on Thursday, July 17, 2025. This decline was primarily driven by a strengthening US Dollar, which benefited from increasing expectations that the Federal Reserve will maintain its current interest rates. The EUR/USD pair fell to 1.1595 from its previous daily close of 1.1639. During Thursday’s trading, the pair reached a high of 1.1642 and a low of 1.1556.

The US Dollar gained approximately 0.4% on Thursday, reaching a four-week high. This surge came amidst growing anticipation that the Federal Reserve will not cut interest rates anytime soon, supported by ongoing improvements in economic conditions. Recent data bolstered this outlook: weekly unemployment claims fell more than expected to a three-month low, retail sales in June surpassed forecasts, and the Philadelphia Fed Business Outlook Survey for July hit a five-month high.

Further pressure on the Euro came from statements by Italy’s Deputy Prime Minister, Antonio Tajani. As Italy is the Eurozone’s third-largest economy, Tajani’s comments advocating for continued interest rate cuts by the European Central Bank (ECB) impacted the single European currency. He suggested that the ECB should “consider a new asset purchase program as part of quantitative easing, in addition to further interest rate reductions.”