Current Exchange Rate Development
The euro has recently surged significantly, reaching nearly 1.1450 US dollars — a level not seen since November 2021. This appreciation is primarily due to weak US economic data, putting pressure on the US dollar. In April 2025, the average exchange rate was already around 1.12 US dollars per euro.
Forecasts and Analyses
Short-term Forecasts
- June 2025: According to current forecasts, the euro will start at around 1.106 dollars. For the month, a peak of up to 1.178 is expected (depending on the source), with the average rather around 1.14.
- Medium-term: Analysts expect continued volatility. Some see potential for a further increase of the euro against the dollar in the second half of the year.
- Long-term: The range of forecasts is broad: optimistic scenarios go up to a year-end level of over 1.21 dollars per euro; more conservative estimates anticipate a correction to around 1.13 or even parity level.
Expert Opinions
- LBBW: Expects a slowdown in interest rate cuts by the Fed due to potential rising inflation in the US. This could strengthen the dollar again and favor parity between the euro and dollar from mid/end of the year.
- PandaForecast & LongForecast: Despite short-term fluctuations, they see potential for a stronger euro in the medium term. A strong upward trend is particularly expected from March/April — with possible pullbacks in the summer or autumn.
Impacts on Investors
Exchange Rate Risks
- Importers/Exporters: A strong euro makes imports from the US cheaper (e.g., raw materials), while exporters become less competitive.
- International Retail Investors: Value gains in foreign currency investments (e.g., US stocks) are diminished by a strong euro.
- Travelers & Consumers: Vacations in the US become cheaper.
Strategic Considerations
- Examine Hedging Options: Currency hedging may be advisable.
- Consider Diversification: International portfolios should be regularly adjusted according to exchange rates.
- Intensify Market Observation: Data on inflation as well as the monetary policy of the Fed and ECB are particularly important.
Summary
The current increase in the euro against the US dollar offers opportunities for importers and consumers in the German-speaking region, as well as challenges for exporting companies and international investors. The further development remains volatile — experts expect both further upward movements and possible setbacks depending on economic and inflation data as well as monetary policy decisions in Europe and the US.