EUR/USD: Euro Languishes Near Two-Year Low as Traders Assess the Way Forward in 2025

Old continent’s currency has almost no good things to look forward to this year. The US dollar? That’s a different animal.

• The EURUSD pair was seen making no moves to start the new year after traders wrapped up 2024 with the euro languishing near a two-year low. The major currency pair slipped to $1.0350 on Tuesday and remained unchanged as forex trading was closed on Wednesday, January 1. Markets are now getting some time to digest all that happened last year and try to figure out what it could mean for the euro-dollar this year.
• It’s looking rather bleak and bearish for the euro, no lie. The European Central Bank appears confident that inflation is no longer a threat and has telegraphed at least two more cuts to interest rates in the near future. With this factored in, the euro is in a pretty bad place as lower rates suggest a depreciation of the local currency. And that’s what we’ve been seeing so far — the euro is lower by almost 8% from its 2024 high of $1.12.
• Stateside, it’s all about the dollar. More power to the greenback is on the cards for 2025 as President-elect Donald Trump gets ready to slap high tariffs on US imports while easing taxes for homegrown businesses, big and small. Add to that a couple of interest rate cuts by the Federal Reserve and you’ve got a potent mix of dollar-boosting ingredients. Here’s to a successful and profitable year ahead!