Money isn't just numbers on a screen. Honestly, if you've looked at your brokerage account or planned a trip to Lisbon lately, you've probably noticed something weird is happening with the price of the euro in dollars.
As of January 18, 2026, the euro is sitting right around 1.16065.
It’s been a choppy start to the year. Just a few weeks ago, we saw the euro touching 1.17, but that momentum sorta evaporated. Now, everyone is asking if the dollar is making a comeback or if the euro is just taking a breather before another climb.
The truth? It’s complicated.
Why the price of the euro in dollars is acting so weird right now
If you want to understand why we’re stuck at 1.16, you have to look at the Federal Reserve and the European Central Bank (ECB). They are basically playing a high-stakes game of "who blinks first."
The Fed just cut interest rates to a range of 3.5% to 3.75% back in December. Usually, when the US cuts rates, the dollar gets weaker. You’d think the euro would be flying high, right?
Not quite.
The ECB has been holding its deposit rate steady at 2.0%. They haven't moved in months. While the gap between US and European rates is getting smaller, the US still offers a better "yield" for investors. People would rather park their cash in 10-year Treasuries yielding over 4.2% than in European bonds that pay significantly less.
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Money flows where it’s treated best. Simple as that.
The "Powell Factor" and market jitters
There’s some drama in Washington too.
You might have seen the headlines about the DOJ investigation into Fed Chair Jerome Powell. There’s been a lot of noise about whether the Fed can stay independent with all this political pressure. When investors get nervous about the Fed, they sometimes sell the dollar, which briefly pushed the price of the euro in dollars higher earlier this month.
But that "Sell America" vibe hasn't lasted.
Why? Because the US economy is still outperforming Europe. We’re seeing GDP growth projections for the US around 2.4% for 2026, while the Eurozone is lucky to hit 1.3%.
Technical levels to watch
If you're trading this or just curious, 1.16 is the big psychological level.
- The Support: If we drop below 1.16, the next stop is likely the 200-day moving average, which is chilling down around 1.1400.
- The Resistance: On the upside, 1.1800 has been a total "line in the sand." Every time the euro tries to break above it, it gets smacked back down.
Goldman Sachs strategists are actually pretty bullish long-term. They’ve gone on record forecasting the euro could hit 1.25 by this time next year. That's a huge move. They’re betting that US inflation will finally cool off enough for the Fed to keep cutting while Europe's economy finally gets its act together.
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But ING is a bit more cautious. They think we’ll stay in this "choppy" 1.17 range for the first quarter of 2026 before seeing any real euro strength in the summer.
Real-world impact: What this means for you
If the price of the euro in dollars stays around 1.16, it’s a bit of a "Goldilocks" zone for travelers.
It’s not as cheap as 2022 when we hit parity (1.00), but it’s a heck of a lot better than the 1.20+ levels we saw years ago. A €50 dinner in Paris will cost you roughly $58. Not bad, but not a steal either.
For businesses, it's a different story.
Large European exporters—think BMW or LVMH—actually like a slightly weaker euro. It makes their cars and handbags cheaper for Americans to buy. If the euro spikes to 1.25 like Goldman says, those companies might start complaining about their profit margins shrinking.
The Greenland and Venezuela wildcards
Believe it or not, geopolitics is creeping into currency prices.
There's been a lot of talk lately about US diplomatic tensions regarding Greenland and operations in Venezuela. While these seem like "side quests" in the news, they create an atmosphere of unpredictability.
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When the world feels unstable, the dollar usually wins because it's the ultimate "safe haven." If things get messier in the Middle East or trade tensions with Canada escalate, expect the euro to lose ground as people rush back to the greenback.
How to play the current exchange rate
Don't try to time the exact bottom. Currencies are notoriously hard to predict because one single jobs report or one tweet from a central banker can flip the script.
Instead, look at the big picture:
- Watch the data: Next week we have US GDP and PCE inflation data. If the numbers are "hot" (higher than expected), the dollar will jump and the euro will fall.
- ECB Tone: Keep an ear out for Christine Lagarde on January 30. If she sounds worried about European growth, the euro is going to have a hard time staying above 1.16.
- Diversify: If you have upcoming expenses in Europe, it might be smart to lock in some of your needs at 1.16 rather than gambling on a drop to 1.14 that might never happen.
The price of the euro in dollars is currently in a tug-of-war. On one side, you have a Fed that is slowly easing its grip. On the other, you have a European economy that is stable but boring.
For now, the bears seem to have a slight edge.
If you're waiting for a "cheap" euro, watch that 1.14 level closely. If you're a euro bull, you really need to see a weekly close above 1.18 to prove the trend has actually changed.
Actionable Next Steps:
- Check your local exchange rates if you're traveling; mid-market rates like 1.16 are rarely what you get at an airport kiosk.
- Monitor the US PCE inflation report on January 23; it is the single most important data point for the Fed's next move.
- Review any Euro-denominated investments to ensure your "currency risk" isn't outweighing your "market gain" if the dollar continues its surprise 2026 rally.