US Dollar Prepares Counterattack. Forecast as of 16.06.2025


The ongoing reshaping of the global trade system is exerting pressure on the US dollar. The US Federal Reserve’s decision to maintain current interest rates has strengthened the greenback. Against this backdrop, the EURUSD pair is consolidating ahead of the FOMC meeting. Let’s discuss this topic and make a trading plan.

The article covers the following subjects:

Major Takeaways

  • The United States is pursuing a policy of encouraging change in China.
  • The US’s shift towards a stronger focus on exports weakens the US dollar.
  • The Fed is expected to keep interest rates unchanged in June.
  • Trades on the EURUSD pair can be considered on false breakouts within the 1.149–1.161 range.

Weekly US Dollar Fundamental Forecast

The United States is attempting to emulate China while also imposing its standards on China. Historically, international trade has been a unidirectional flow. The United States was the world’s largest consumer, and as a result, it had a foreign trade deficit. In China, however, the opposite was true. The country’s export-oriented economic strategy resulted in a significant surplus. Donald Trump’s decision has had a significant impact on the status quo, and the US dollar has weakened.

The US administration has announced that it has reached an agreement with China. This approach is believed to be mutually beneficial for both Washington and Beijing. The issue is that China’s economy is not reliant on foreign goods. Since 2022, its imports in real terms have seen minimal growth. Conversely, exports have surged by 33%. The country’s strategic approach is to focus on exports while maintaining a strict policy of non-importation.

President Donald Trump’s initiative to shift production back to the United States marks a pivotal shift in the nation’s economic landscape, potentially transforming the country into a China-like manufacturing hub. The US administration has announced its intention to increase the share of exports in GDP from the current 10–12% range, with the aim of reducing the trade deficit. However, along with the weakening of the US dollar, this has led to a number of issues that have led the Fed to express doubt about the future. Meanwhile, the situation is not yet clear. The most effective solution is to maintain interest rates, a position that does not align with the preferences of the US administration.

Market Expectations on Fed Interest Rate

Source: Bloomberg.

The derivatives market indicates a high probability of monetary expansion between March and June 2026. Jerome Powell’s term as Federal Reserve Chair expires at the end of winter. Markets are optimistic that the new US regulator head will align his policies with those of Donald Trump.

However, the US administration must take responsibility for the Fed’s lack of action. The ongoing uncertainty surrounding the US administration’s economic policy is a contributing factor to the high rates. An additional argument in favor of extending the pause at the fourth consecutive Federal Open Market Committee (FOMC) meeting is the ongoing Israeli-Iranian conflict. According to Bloomberg’s estimates, a rise in oil prices to $100 per barrel will result in a 17% increase in gasoline prices and a 3.2% acceleration in inflation in the US by the end of June. Notably, these estimates do not consider the impact of tariffs!

A pause in the Fed’s monetary expansion cycle is beneficial for the US dollar, but restructuring the international trading system is unfavorable. Following a swift advance, the EURUSD pair has stabilized, showcasing a consolidation. Investors are awaiting further guidance from the Fed. Should the FOMC signal a less aggressive rate-cutting schedule in 2025 or higher inflation forecasts, the greenback is likely to respond with a robust recovery. Therefore, it would be wise to stay out of the market.

Weekly EURUSD Trading Plan

Prior to the release of the June Fed meeting results, the EURUSD pair is likely to consolidate, with the possibility of false breakouts within the established trading range of 1.149–1.161. Traders may consider purchasing the euro near the upper boundary but should be prepared to open short trades immediately if the price returns to the trading channel. Notably, selling the euro at the lower boundary with a similar reversion to long trades is also a relevant strategy.


This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.

Price chart of EURUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance broker. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2014/65/EU.


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