empty
03.01.2025 12:52 AM
The Dollar Turns Capricious

Can the trajectory of three independent bodies be accurately predicted if their interactions are chaotic? Physics suggests it cannot. However, traders remain hopeful that they can chart the movements of financial assets influenced by the interplay of the economy, politics, and markets. In 2025, this task becomes even more challenging as U.S. policy under Donald Trump's return to power grows increasingly unpredictable. For now, this volatility is driving EUR/USD steadily toward parity.

The economy indicates the continuation of an era of American exceptionalism, while politics introduces greater uncertainty, and recent terrorist attacks in New Orleans and Las Vegas have shaken the markets. These factors are strengthening the U.S. dollar, both through economic divergence and its status as a safe-haven asset. Consequently, the EUR/USD has fallen below 1.04, approaching its December lows, beyond which lies a potential abyss.

The economy, politics, and financial markets all play a significant role in shaping central bank actions. These actions, in turn, influence the formation of exchange rates in the foreign exchange (Forex) market. Since U.S. dollar transactions represent approximately 90% of all currency trading, it is no surprise that investors closely monitor the Federal Reserve's decisions.

As 2024 began, markets were anticipating cuts to the federal funds rate 6 to 7 times, which suggested a substantial weakening of the dollar. However, by early 2025, this narrative changed dramatically. Now, the Fed is expected to implement only two rounds of monetary easing, with a strong likelihood of pausing rate cuts in both January and March. This shift creates a favorable outlook for those trading against the euro in the EUR/USD pair.

Fed Rate Dynamics and Expectations

This image is no longer relevant

Events of the past year underscored a simple truth: when forecasts fail, expect asset movements in the opposite direction. For instance, accelerating U.S. inflation in the first quarter and Donald Trump's victory in the November presidential election forced dollar skeptics to retreat. The greenback emerged as the top-performing currency on Forex among over 30 tracked by Bloomberg.

This image is no longer relevant

What could disrupt the downward trend of the EUR/USD exchange rate in 2025? There are a few scenarios to consider. First, a reversal in trade policies related to Donald Trump could occur. The Republican made many promises during the election campaign, but it remains uncertain whether these promises will be fulfilled. Second, the U.S. economy could experience weakness, as high interest rates may finally take their toll. Lastly, the absence of a trade war could allow both China and the Eurozone to recover. At present, these scenarios seem unlikely, and the EUR/USD continues its steady march toward parity.

From a technical standpoint, the daily EUR/USD chart shows that hopes for a reversal using patterns like the Expanding Wedge and Double Bottom are fading. If the price breaks below the support level around 1.0345, it could open the way to levels of 1.0120 and 1.0000, creating opportunities to increase short positions.

Seleccione el marco de tiempo
5
min
15
min
30
min
1
hora
4
horas
1
día
1
s.
Gana con los cambios en el valor de las criptomonedas con InstaForex.
Descarga MetaTrader 4 y abre tu primera operación.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    UNIRSE AL CONCURSO

Recommended Stories

El caos en los mercados continuará (hay probabilidad de una continuación de la caída local del #USDX y del precio del oro)

Los mercados continúan actuando a ciegas en medio de las acciones caóticas de D. Trump, quien intenta sacar a EE.UU. de la más profunda crisis integral como el barón

Pati Gani 11:26 2025-05-23 UTC+2

Análisis del par GBP/USD. El 22 de mayo. El mercado vuelve a responder sin ambigüedades a Trump.

El par de divisas GBP/USD continuó su movimiento hacia el norte el miércoles, aunque a primera vista no había razones claras para ello. Sí, el nivel de inflación (el único

Paolo Greco 07:12 2025-05-22 UTC+2

Análisis del par EUR/USD. El 22 de mayo. Un nuevo golpe al dólar: «One big beautiful bill act».

El par de divisas EUR/USD continuó su movimiento ascendente durante el miércoles. El dólar estadounidense lleva cayendo sin pausa por más de una semana, algo que no sucedía en todo

Paolo Greco 07:12 2025-05-22 UTC+2

El Bitcoin se convierte en víctima de estafadores

La confianza en el mundo financiero no solo puede perderla el dólar estadounidense. La información sobre el robo de datos de aproximadamente 197 mil clientes de Coinbase, la mayor plataforma

Marek Petkovich 14:05 2025-05-19 UTC+2

Análisis del par GBP/USD. El 19 de mayo. ¿Qué esperar de la inflación en EE. UU.?

El par de divisas GBP/USD continuó el viernes su movimiento lateral, que ya se observa desde hace un mes. En principio, en la ilustración del marco temporal de 4 horas

Paolo Greco 07:26 2025-05-19 UTC+2

Análisis del par EUR/USD. El 19 de mayo. La guerra comercial frena al dólar.

El par de divisas EUR/USD se negoció con caídas mínimas durante la jornada del viernes, con una volatilidad en general a la baja tras un «abril loco» La divisa estadounidense

Paolo Greco 07:26 2025-05-19 UTC+2

EUR/USD. En la trampa del rango lateral

El par euro-dólar sigue cotizando dentro de un rango estrecho, reaccionando de forma débil a acontecimientos fundamentales importantes. Por tercer día consecutivo, los compradores de EUR/USD intentan volver

Irina Manzenko 12:47 2025-05-16 UTC+2

Análisis del par GBP/USD. El 15 de mayo. El calvario del dólar continúa.

El par de divisas GBP/USD continuó su crecimiento el miércoles, que había comenzado el martes. Recordemos que el martes el mercado no tenía ninguna razón de peso para deshacerse masivamente

Paolo Greco 07:30 2025-05-15 UTC+2

Análisis del par EUR/USD. 15 de mayo. La fe del mercado en el dólar está por el suelo.

El par de divisas EUR/USD continuó su recuperación durante el miércoles en un contexto de calendario macroeconómico absolutamente vacío. Ni siquiera destacamos el único informe del día sobre la inflación

Paolo Greco 07:30 2025-05-15 UTC+2

Análisis del par GBP/USD. El 14 de mayo. Solo importa el tratado comercial.

El lunes, la moneda estadounidense se fortaleció considerablemente tras el éxito en la primera ronda de negociaciones entre EE. UU. y China, aunque, en esencia, ambas partes solo acordaron

Paolo Greco 07:22 2025-05-14 UTC+2
¿No puede hablar ahora mismo?
Ingrese su pregunta en el chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.