EUR/USD supported by Euro resilience amid US recession fears and Fed charge minimize bets – Rabobank

Since US President Trump’s reciprocal tariffs handle on April 2, the EUR is the second greatest performing G10 forex after the safe-haven CHF, Rabobank’s FX analyst Jane Foley reviews.

EUR holds floor amid tariff turmoil

“The EUR’s resilience has stemmed from the optimism triggered by the relief in Germany’s debt brake in March and by the broad-based assumption that this was a sport altering occasion for the area. The EUR was boosted additional by the rotation out of US belongings triggered by fears that Trump’s tariffs may push the US into recession and set off a spike in inflation.”

“The rotation commerce has since stalled. However, whereas the S&P 500 has made a sequence of latest document highs since June, the USD continues to tug its toes, undermined by expectations of extra aggressive Fed charge cuts.”

“RaboResearch has adjusted its forecasts and now sees 4 Fed charge cuts in 2026 along with a minimize in September. That mentioned, the transfer is generally priced in and, since there’s lots of excellent news mirrored within the EUR, we stay reluctant to push our EUR/USD forecast past our 1.20 goal, although now we have introduced it ahead to a 9-month view. Certainly, assuming fears of US recession proceed to recede, we proceed to see threat of short-covering strain in favour of the USD on a 1-to-3-month view and forecast a dip to EUR/USD1.15.”