The EUR\/USD exchange rate is approaching the 1.19 level, influenced by a reduction in the Dollar’s value. Market analysts suggest that unpredictable US policies could precipitate a substantial and lasting decline in the Dollar’s strength. Current conditions indicate that unless the US enhances relations with key Western allies, this trend of Dollar depreciation may persist.<\/p>\n
Concerns exist that such US policy unpredictability could lead to a crossing of a market threshold from which recovery might be difficult. This scenario might result in the market anticipating an uncontrollable Dollar depreciation. Even if policymakers attempt to reverse course, stabilising the Dollar may prove challenging. <\/p>\n
This article is produced by the FXStreet Insights Team, which curates market observations from a range of experts. The information presented combines insights from commercial sources along with additional analyses.<\/p>\n
The EUR\/USD exchange rate is actively testing the 1.19 resistance level, a move driven by widespread dollar weakness. This trend gained momentum after US CPI data for December 2025 came in below expectations at 2.5%, fueling bets on Federal Reserve rate cuts later this year. The contrast with the Eurozone, where inflation remains stickier at 2.8%, is providing a clear tailwind for the euro.<\/p>\n
There is a growing danger that the market is approaching a tipping point from which there is no easy return for the dollar. We are seeing unpredictable US trade policy, including renewed verbal threats of tariffs against European allies, which is unsettling investors. This political risk is now a primary driver, potentially leading to a scenario where the dollar depreciates uncontrollably.<\/p>\n
For derivative traders, this environment suggests positioning for a breakout above 1.19. One-month implied volatility on EUR\/USD has already ticked up to 8.5% from 7.0% at the start of the year, showing the market is pricing in larger price swings. Buying EUR\/USD call options with strike prices at 1.1950 and 1.2000 could capture this expected upward momentum.<\/p>\n
We recall the sharp, policy-driven market moves of 2022, and the current situation is beginning to rhyme with that period of heightened uncertainty. Unlike the short-term shocks we saw in 2025, the combination of economic divergence and political friction points towards a more sustained trend of dollar weakness. Therefore, strategies should be geared towards a multi-week move rather than a brief spike.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD nears 1.19 as Dollar weakens; persistent US policy unpredictability may fuel further depreciation.<\/p>\n","protected":false},"author":62,"featured_media":16962,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40106","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=40106"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40106\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16962"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}