EUR/USD Morning Brief – June 23, 2026

The euro is trading with moderate weakness against the US dollar amid diverging central bank policies and softer Eurozone economic data. EUR/USD is currently around 1.1426.

The downward pressure intensified after the European Central Bank’s recent decision to raise its deposit rate by 25 basis points to 2.25%. Although rate hikes typically support a currency, the Eurosystem staff simultaneously lowered the 2026 GDP growth forecast to 0.8% and raised the inflation projection to 3.0%. This mix of tighter policy and subdued growth has raised concerns among investors about the Eurozone’s economic outlook.

In contrast, the US dollar is supported by the Federal Reserve’s relatively hawkish stance. Solid US consumer demand and a resilient labour market provide the Fed with greater policy flexibility. Additionally, the temporary lifting of sanctions on Iranian crude has contributed to lower energy prices, which has further strengthened the dollar’s relative position.

With few major data releases scheduled for early Tuesday, trading remains driven by existing macro themes. Attention is now shifting toward the upcoming June flash PMI figures, particularly the manufacturing data from Germany. Market participants are watching whether a weaker-than-expected print could prompt the ECB to take a more cautious approach to further rate hikes.

Market Outlook: The near-term bias for EUR/USD leans to the downside. Sellers are defending the area around 1.1460, with the pair vulnerable to a test of the 1.1400 support level. A sustained break below 1.1400 could open the way toward 1.1350. On the upside, a move above 1.1460 would be needed to ease immediate pressure, with stronger resistance seen near 1.1500–1.1530.