The euro fell against the dollar under pressure as the sluggish German economic data caused market concerns

In June 2025, after the release of the German IFO business climate index, the euro/dollar (EUR/USD) fell below the 1.0700 support level, reaching a low of 1.0665, the lowest level in two weeks. Data showed that Germany's business climate index fell to 85.4 in June, far below the market expectation of 87.0, and companies' economic expectations for the next six months also weakened significantly.

This data once again confirms the fact that the eurozone's manufacturing and service industries are weak in recovery, and investors' confidence in the European Central Bank's continued tightening policy has declined. The market generally believes that the European Central Bank will keep interest rates stable in the coming months, but with the slowdown in domestic demand and weak external exports, monetary policy may need to be reassessed.

Meanwhile, the US durable goods orders unexpectedly grew by 0.6% in May, higher than the expected 0.3%, showing that manufacturing activity remained resilient. The US dollar index (DXY) remained above 104.8, and the market's expectations that the Federal Reserve would keep interest rates unchanged in the short term were further strengthened.

From a technical perspective, if the euro falls below 1.0650 against the US dollar, it will face the risk of further correction to 1.0590; if it rebounds, it will need to break through 1.0720 to ease the downward pressure.

As German economic data continues to weaken, the uncertainty facing the euro has intensified. Against the backdrop of a strong dollar, the euro still has room to fall against the dollar in the short term. Investors should pay close attention to the inflation and employment data to be released in the eurozone to determine whether the ECB is likely to change its current policy pace.