Euro Weakens Against the Dollar Despite Upgraded Growth Outlook

The euro slipped against the U.S. dollar today, with EUR/USD down 0.30%, as the greenback strengthened and cautious remarks from the European Central Bank weighed on sentiment.

ECB Vice President Luis de Guindos warned that financial stability risks in the Eurozone “remain elevated,” citing uncertainty over global economic trends and the potential impact of tariffs in a volatile international environment. His comments added pressure on the single currency.

At the same time, the euro found some support from the European Commission, which raised its 2025 Eurozone GDP forecast to 1.3%, up from 0.9% in May.

Inflation expectations for 2025 were left unchanged at 2.1%, signalling confidence in the region’s growth prospects.

Central bank policy divergence also underpins the euro.

The ECB is widely seen as having concluded its rate‑cut cycle, while the Federal Reserve is expected to deliver several more cuts by the end of 2026. This contrast in monetary paths provides a measure of support for the euro, even as near‑term pressures from a stronger dollar persist.