EUR/USD weekly outlook: Dollar weakness ahead of Jackson Hole

EUR/USD impact: Mildly bullish in the near term, but highly event-sensitive.

The reported rotation away from the dollar suggests that markets are reassessing the relative attractiveness of U.S. assets, fiscal sustainability, and the future path of Federal Reserve policy. The accompanying rally in long-duration Treasuries is particularly important: lower yields reduce the dollar’s carry advantage and can encourage capital flows into the euro and other major currencies. This creates a supportive macro backdrop for EUR/USD.

The main catalyst is the Jackson Hole Economic Policy Symposium, scheduled for August 27–29, 2026. Ahead of the event, traders may continue to price a softer Fed stance if Treasury strength reflects expectations of slower U.S. growth, easing inflation, or less restrictive monetary policy. That would generally favor EUR/USD upside and reinforce weakness in the broader dollar complex.

However, the move is not unambiguously bullish for the euro. Gains in the Swiss franc, gold, and silver alongside dollar selling point to a defensive reallocation rather than a clear improvement in global growth expectations. In that environment, the euro may benefit mechanically from dollar weakness but could underperform traditional havens if risk aversion intensifies. Eurozone fiscal conditions are also uneven, so the “stronger fiscal position” theme may support the euro only relative to the United States, not necessarily as an independent euro-positive growth story.

Key risks to the bullish interpretation:

• A more hawkish-than-expected Fed message could lift Treasury yields and trigger a sharp dollar rebound.
• A neutral Jackson Hole communication may prompt profit-taking after pre-event dollar selling.
• Renewed market stress could favor the Swiss franc and dollar over the euro despite lower U.S. yields.
• Weak eurozone activity or softer inflation could revive expectations for easier ECB policy and limit EUR/USD gains.

Trading focus:

monitor U.S. two- and ten-year yields, broad dollar momentum, EUR/USD reaction to Jackson Hole headlines, and whether safe-haven demand remains concentrated in CHF and precious metals. The immediate bias favors euro upside, but confirmation requires dollar weakness to persist after the symposium rather than merely reflect pre-event positioning.