US macro resilience is widening the gap with Europe
The latest macro picture continues to favour the dollar. While the US economy has cooled from its earlier pace, it is still showing more resilience than the eurozone, where soft survey data and weak momentum continue to point to a much more fragile backdrop.
That divergence matters for EUR/USD because it keeps reinforcing the idea that the US can tolerate tighter financial conditions more easily than Europe. If incoming business surveys underline that gap again, the euro may struggle to attract enough support to reverse its recent weakness.
Markets are starting to price higher US rates again
The dollar has also found support from the rates market after a run of firmer US inflation and labour-market data. With unemployment still holding around 4.3% and both CPI and PPI surprising to the upside, traders have started to rebuild expectations that the Federal Reserve may need to stay tighter for longer.
According to the source analysis, Fed funds futures are now pricing a 61.13% probability of a 25-basis-point rate increase in 2026, which would lift the policy rate to 4.00%. That repricing has helped US yields push higher and has made the dollar more attractive against lower-yielding peers.
Wider rate differentials are giving the dollar fresh momentum
A firmer US yield backdrop is now feeding directly into the FX market. As the spread between US rates and eurozone rates widens again, the dollar has started to recover momentum and EUR/USD has moved back under pressure.
