EUR/USD posted solid gains late in the North American session on Friday after rumors of intervention in FX markets to boost the Japanese Yen led the US Dollar (USD) to lose more than 0.70%, according to the US Dollar Index (DXY). This happened despite economic data being marginally positive on Friday. At the time of writing, the pair is trading at 1.1811 after reaching a four-month high of 1.1826 earlier in the day.
Euro rises sharply as speculation of foreign exchange intervention sends dollar to multi-month low
Bloomberg’s headline, “Yen jumps most since August as intervention risks rise,” was published late in the session, amid speculation that Japanese authorities were preparing to intervene in the markets.
The Bloomberg story noted that “Traders reported that the Federal Reserve Bank of New York had conducted a so-called rate check with major banks to ask for nominal exchange rates – a move that was seen as a signal that it is preparing to assist with another intervention.”
As a result, the DXY, which measures the US currency value against the other six, extended its losses to levels not seen in September 2025, down from 98.33, and stands at 97.53.
According to a survey by the University of Michigan, US economic data showed that US consumer sentiment has improved. Regarding business activity, the S&P Global Flash Purchasing Managers’ Index showed signs of strength in the economy, yet S&P’s chief economist said economic growth in the US could decline further for Q1 2026.
In Europe, HCOB flash PMIs for the bloc were mixed, with composites and services PMIs falling below estimates, while manufacturing PMIs showed signs of modest expansion.
Next week’s economic data
The Europe schedule will feature Germany’s Business Climate and GfK Consumer. Gross Domestic Product (GDP) figures of Germany, Spain and France will be revealed. Additionally, traders will also be keeping an eye on speeches from European Central Bank (ECB) officials such as Nagel, Lagarde, Alderson and Schnabel.
In the US, traders will focus on durable goods orders, ADP employment change to the four-week moving average, Federal Open Market Committee policy decisions and the subsequent press conference by Fed Chairman Jerome Powell.
Daily Digest Market Movers: Euro appreciates as dollar falls
- The University of Michigan’s consumer sentiment came in at 56.4, beating forecasts of 54 in its last reading in December. Joan Su, the economist in charge, revealed that households remain under purchasing power pressure and are concerned about high prices and a weak job market.
- The survey showed that inflation expectations have declined. One-year expectations fell to 4.0% from 4.2%, while five-year expectations fell to 3.3% from 3.4%.
- The S&P Global Composite PMI showed a slight gain in December, rising to 52.8 from 52.7. However, Chris Williamson, chief business economist at S&P Global Market Intelligence, warned that slower new business growth in both manufacturing and services increases the risk that first-quarter growth could disappoint.
- Eurozone flash PMI data showed the services sector weakened in January, with the index falling to 51.9, below both the December reading and market expectations. The earlier release from Germany surprised, with the services PMI exceeding expectations in the expansion sector, while the manufacturing PMI showed improvement, but remains below expansion/contraction levels.
euro price this week
The table below shows the percentage change in the Euro (EUR) against the major currencies listed this week. The euro was the strongest against the US dollar.
| USD | EUR | gbp | JPY | scurvy | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.97% | -2.01% | -1.20% | -1.50% | -3.18% | -3.37% | -2.28% | |
| EUR | 1.97% | -0.05% | 0.76% | 0.47% | -1.25% | -1.44% | -0.33% | |
| gbp | 2.01% | 0.05% | 0.57% | 0.52% | -1.19% | -1.40% | -0.28% | |
| JPY | 1.20% | -0.76% | -0.57% | -0.28% | -1.98% | -2.17% | -1.07% | |
| scurvy | 1.50% | -0.47% | -0.52% | 0.28% | -1.68% | -1.89% | -0.80% | |
| AUD | 3.18% | 1.25% | 1.19% | 1.98% | 1.68% | -0.19% | 0.94% | |
| NZD | 3.37% | 1.44% | 1.40% | 2.17% | 1.89% | 0.19% | 1.13% | |
| CHF | 2.28% | 0.33% | 0.28% | 1.07% | 0.80% | -0.94% | -1.13% |
The heat map shows the percentage change of major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select Euro from the left column and move along the horizontal line to US Dollar, the percentage change displayed in the box will represent EUR (basis)/USD (quote).
Technical outlook: EUR/USD breaks 1.1800, eyes 1.200
The technical picture of EUR/USD shows a breakout of the downslope trendline drawn from the daily highs of September and December, which was cleared around 1.1775, allowing the pair to move beyond the 1.1800 figure to a yearly high of 1.1826.
The momentum as measured by the Relative Strength Index (RSI) indicates that buyers are in charge. Furthermore, a clear break of the December 24 high of 1.1807 shifted the trend from sideways to up.
For continuation of the bullish trend, traders need to surpass 1.1850 while keeping an eye on the 2025 yearly peak at 1.1918. Violation of the latter opens the discussion to a test of 1.2000.
On the downside, the first major support is 1.1750, which could clear the way towards 1.1700.
Euro FAQ
The euro is the currency of the 20 European Union countries that belong to the Eurozone. It is the second most traded currency in the world after the US dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of more than $2.2 trillion per day. EUR/USD is the most traded currency pair in the world, with an estimated 30% discount on all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the eurozone. The ECB sets interest rates and manages monetary policy. The primary mandate of the ECB is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is to increase or decrease interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by the six permanent members, including the heads of the eurozone’s national banks and ECB President Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the euro. If inflation rises more than expected, especially if above the ECB’s 2% target, the ECB is forced to raise interest rates to bring it back under control. The euro will generally benefit from relatively higher interest rates compared to its peers, as it makes the region more attractive as a place for global investors to park their money.
The data release reflects the health of the economy and could have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer sentiment surveys can influence the direction of the single currency. A strong economy is good for the euro. This not only attracts more foreign investment but it could also encourage the ECB to raise interest rates, which would directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to decline. Economic data from the euro area’s four largest economies (Germany, France, Italy and Spain) are particularly important, as they account for 75% of the euro area economy.
Another important data release for the euro is the trade balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports during a given period. If a country produces highly demanded exports the value of its currency will be derived entirely from the additional demand generated from foreign buyers wishing to purchase these goods. Therefore, a positive net trade balance strengthens a currency and vice versa for a negative balance.
