Speculation over Trump possibly replacing Fed Chair Powell reignited long-term inflation concerns, especially as the President continues pressing for rate cuts.
The euro may still have significant room to rise against the U.S. dollar, according to Morgan Stanley. In a recent client note, the bank’s strategists projected that EUR/USD could break above 1.30, which is driven by accelerated currency hedging among European investors. The outlook surpasses Morgan Stanley’s already bullish 2026 year-end forecast of 1.27.
EUR/USD traded around 1.1620 on Thursday, slipping from earlier highs as markets awaited Eurozone HICP and U.S. retail sales data. The dollar stayed firm on Fed rate-hold expectations amid Trump’s new tariff plans. Resistance is at 1.1670, support at 1.1580.