Published research is leaning bearish on the euro in the near term, with several recent analyses pointing to further downside against the dollar before any recovery takes hold.
The trigger, according to the research consensus, is a much softer-than-expected Eurozone inflation print — both headline and core came in below forecasts. That has forced markets to dial back expectations for further ECB rate hikes, and analysts argue this dovish shift is the primary driver of euro weakness. One camp adds that Eurozone growth momentum has faded, and warns a strong US jobs number could deepen the move. A recurring theme in recently-published work: the "Fed-dollar" story is dominating the summer, with markets still pricing US hikes even as the ECB signals a pause after September — a clear rate-differential headwind for the euro.
A more nuanced thread of research sees a two-stage path: a tactical retest toward 1.13 in the coming weeks, then a potential recovery into the 1.16–1.18 zone by year-end — but only if the Fed stops hiking.