Euro Below 1.15: The Currency Market’s June Reckoning
The euro’s spring decline has crossed a psychological threshold.
EUR/USD traded down to 1.146 on Wednesday, its lowest level in over a year, completing a 300-pip slide from the mid-May highs. The June breakdown through 1.15 has been swift, orderly, and — most telling of all — largely ignored by the financial press, which remains fixated on the yen’s drama above 161.
The three-engine selloff
Engine one is rates: the US–eurozone yield gap keeps widening as European data disappoints and American data hold firm. Engine two is flows: month-after-month of European portfolio outflows, as domestic investors seek returns abroad, creates a structural seller that doesn’t care about intraday levels. Engine three is momentum: once 1.15 broke, systematic funds added shorts automatically, and their models will keep pressing until the trend bends.
None of these engines requires bad news. They run on the absence of good news — and Europe hasn’t produced good news in months.
What the ECB can and can’t do
The ECB could try to talk the euro up, but with growth this weak, jawboning a stronger currency would be self-sabotage. A rate cut would help growth but hurt the euro further. The central bank is trapped, and markets know it. That trap is, frankly, the bear case in a single sentence.
Levels: 1.1418 (June low) below opens 1.1325, the 2025 base. A reclaim of 1.1580 would be the first sign the sellers are done. Until then, rallies are gifts to the patient.
Disclaimer: This is market commentary, not investment advice. Trading FX, commodities, equities and crypto carries substantial risk of loss.
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