Euro to Dollar Price Forecast: 1.150 on Hawkish Fed Signal?

Market impact: Bearish EUR/USD in the near term, but highly dependent on Fed guidance.

The rate decision itself is unlikely to be the main catalyst: markets were already assigning roughly a 93% probability to a September Fed hike, meaning much of the initial dollar-supportive reaction may already be priced in. The larger risk is the Fed’s signal on additional tightening. A hawkish message that keeps further hikes in play would likely lift front-end US yields, reinforce dollar carry demand, and pressure EUR/USD toward ING’s 1.1500 short-term objective from around 1.1540.

The setup is particularly sensitive to risk appetite. The source notes that higher US short-term yields, elevated oil prices, and weaker equity sentiment have recently supported the dollar. If the Fed combines a hike with concern about inflation persistence or a willingness to tighten further, those pressures could reinforce one another: higher yields and risk reduction would favor USD over EUR and potentially weigh on other high-beta currencies as well.

The principal upside risk for EUR/USD is a dovish hike. If the Fed raises rates but signals that the move is largely one-off, or reduces expectations for subsequent hikes, the market could unwind some of its long-dollar positioning. With ING’s models describing EUR/USD as near fair value and slightly undervalued, a limited post-decision dollar reaction could allow a rebound rather than a sustained break lower.

The 1.1500 area should therefore be treated as a conditional forecast, not an established technical signal. A durable move below it would require confirmation from US rate repricing, continued equity weakness, or persistent oil-driven inflation concerns. Conversely, falling Treasury yields, a softer Fed communication, improving geopolitical conditions—particularly easing oil-market stress—or stronger European data would weaken the bearish dollar thesis.

Traders should monitor:

the Fed’s forward guidance and projections, the reaction in two-year US yields, equity-market direction, oil prices, and whether EUR/USD can hold above or decisively lose the 1.1500 region. The immediate bias is dollar-positive, while the medium-term outlook remains less one-sided because the article also cites expectations that structural dollar headwinds could re-emerge after the initial Fed-driven support.