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EUR/USD hits lowest since mid-2025 amid rising US rate expectations

Commerzbank says the dollar’s direction will depend on whether markets keep pricing an October Fed hike, temper near term tightening expectations, or push out rate expectations to December.

Reported · Written up by our desk · Major Pairs

FXStreet reported that Commerzbank’s Thu Lan Nguyen said EUR/USD fell to its lowest level since mid-2025 as dollar strength is linked to rising US rate expectations and a higher probability of an October Fed hike than an ECB move.

Commerzbank outlined three potential scenarios for how the dollar could trade based on Fed signaling, including one in which the dollar holds gains if the Fed raises rates and signals willingness to tighten further.

In an alternative scenario where the Fed raises rates but tempers expectations for additional near term hikes, Commerzbank said the dollar could weaken moderately if some rate increases priced in by markets become less certain.

FXStreet also noted Commerzbank’s third scenario, where the Fed holds rates and points to a likely next move in December, with the dollar’s reaction depending on whether expectations are postponed only temporarily or revised more substantially.

Latest closeEUR/USD 1.137 ▼0.1%

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