Daily Forex Analysis

EUR/USD advanced toward $1.14 as U.S. fiscal concerns weighed on the dollar, while the yen touched a one-month high on inflation surprises and risk aversion.

The euro extended its recovery, nearing 1.1330, helped by muted European headlines and hopes for progress in U.S. trade talks. The Japanese yen broke below 144.00 as hawkish BoJ expectations supported gains.

EUR/USD rebounded near 1.1330 as Treasury yields fell and traders awaited Eurozone GDP data.

The euro and British pound extended their rallies on Thursday amid mounting concerns over the U.S. fiscal outlook, following Moody’s downgrade of the U.S. credit rating. 

EUR/USD pushed higher toward 1.1330, lifted by a weaker dollar and cautious optimism around U.S. tariff de-escalation.

Risk sentiment shifted this week as Moody’s downgraded the US credit rating, weakening the dollar and supporting major currencies and commodities.

The U.S. dollar gained traction Monday after the U.S. and China agreed to pause retaliatory tariffs for 90 days, prompting a gap lower in EUR/USD to 1.1064. Meanwhile, Moody’s downgraded the U.S. credit rating, citing fiscal concerns, sparking risk aversion and supporting safe-haven assets like gold and the yen. 

The euro advanced near $1.12 as the dollar softened, even as ECB rate cut bets remained firmly priced in. The yen strengthened for a fourth straight day despite a contraction in Japan’s Q1 GDP.