On Monday in Asia, the EUR/USD pair remained subdued, hovering around the 1.1630–1.1640 region, as the US Dollar (USD) climbed toward a near three-month high and the Euro (EUR) faced pressure.
Investor attention turned to two major central-bank meetings this week — the Federal Reserve (Fed) and the European Central Bank (ECB) — and elevated optimism about a US-China trade truce added to the dollar’s firm footing.

US-China Trade Optimism & Manufacturing Weakness in Asia

Markets were encouraged by signs of progress in US-China negotiations, which helped lift broader risk appetite and allowed the dollar to strengthen despite a generally “risk-on” tone.
At the same time, Asia’s manufacturing data disappointed: surveys showed China’s factory activity declining for the seventh month and South Korea’s export orders shrinking, highlighting that the export-led growth engine remains under strain despite trade optimism. For currency markets, this meant the euro lost some of its usual “risk-on” advantage and the dollar benefitted from a comparatively safer posture.

What’s Next: Central Bank Watch

The spotlight now shifts firmly to the Fed meeting. Markets broadly expect a 25-basis-point rate cut, but the real focus will be on the tone of Fed Chair Jerome Powell’s remarks — whether they hint at further easing or signal caution. Any indication that this could be the last cut for the year could bolster the dollar further.
Meanwhile, the ECB meeting (scheduled for Thursday) also looms large. Analysts largely expect no policy change, but traders will parse President Christine Lagarde’s commentary for clues on possible rate cuts in 2026 and beyond.

Bottom Line

The euro is under pressure as the dollar finds renewed strength amid US-China trade optimism and cautious central-bank positioning. Unless markets receive a markedly dovish surprise from the Fed or an unexpectedly hawkish tilt from the ECB, the current range for EUR/USD seems likely to hold — with downward bias toward the support zone at ~1.1600 in focus.