EUR/USD Holds Firm Near 1.1700 as Fed Independence Worries Weigh on Dollar

• EUR/USD trades near 1.1700, just shy of the 1.1745 peak—its highest level since September 2021.
• The US Dollar remains under pressure amid renewed concerns over the Federal Reserve’s independence.
• French President Macron warns of EU retaliation if the US enforces a 10% tariff.

EUR/USD Analysis: Bullish Momentum Sustained Near Multi-Year Highs

The EUR/USD pair is consolidating around the 1.1700 mark in Friday’s Asian session, extending its winning streak that began on June 18. The Euro continues to outperform as the US Dollar struggles under the weight of rising political pressure on the Federal Reserve.

US President Donald Trump reignited uncertainty by publicly criticizing Fed Chair Jerome Powell, calling him “terrible” during comments made at the NATO summit in The Hague. Trump hinted at revealing a successor as early as September or October, potentially undermining the Fed’s perceived independence ahead of the 2025 transition.

In response, Chicago Fed President Austan Goolsbee emphasized that monetary policy decisions remain shielded from political influence. “Just look at the minutes and transcripts,” he said, reiterating the Fed’s transparency and data-driven approach.

Trade Tensions and Eurozone Policy Outlook Support Euro Strength

Adding to the market tension, French President Emmanuel Macron voiced support for a balanced EU-US trade agreement but warned that Europe would impose equivalent tariffs if the US proceeds with a 10% levy on imports.

On the policy front, European Central Bank (ECB) Vice President Luis de Guindos stated that the Euro’s global role could strengthen if the EU advances with institutional reforms. Meanwhile, ECB Chief Economist Philip Lane noted that monetary policy would need to factor in both baseline forecasts and downside risks to activity and inflation.

Outlook

With the US Dollar under sustained pressure and the Euro supported by both macroeconomic optimism and political resolve, the EUR/USD remains well-positioned to test fresh highs. Traders will closely monitor upcoming US inflation data and developments around Fed leadership discussions for directional cues.

Stay Updated with Daily Forex Pakistan.