The euro is on a downward trend at the start of 2026

In January 2026, the euro experienced a downward trend against the US dollar, with the exchange rate falling from around USD 1.1747 at the start of January to a low point of USD 1.1602 on January 16, a weakening of 1.24% over one month. The euro is, however, still 12.88% stronger on an annual basis.

Daily rate trend

The EUR/USD exchange rate evolved as follows during the first fortnight of January 2026 (1.1668 USD on average):

Exchange rate (1 EUR = USD)

1/01 1,1747

2/01 1,1726

5/01 1,1718

6/01 1,1690

7/01 1,1677

8/01 1,1661

9/01 1,1635

12/01 1,1668

13/01 1,1645

14/01 1,1645

15/01 1,1609

16/01 1,1602

At the start of the year (January 2026), the euro (EUR) to US dollar (USD) exchange rate showed a downward trend, with an average rate of 1.1668 USD to the euro.

On January 16, the exchange rate reached 1.1602 USD. This was the lowest level reached in January, after falling from 1.1747 USD on January 1; the dollar gained +0.27% that day.

Causes of the fall

The decline is due to a stronger dollar as a result of expected rate hikes by the Federal Reserve (US central bank) and ongoing economic uncertainty in the Eurozone, including inflationary pressures and low growth rates. Analysts predict a possible further fall to as low as $1.15 by the end of 2026, depending of course on ECB(European Central Bank) policy and geopolitical tensions.

The euro therefore started 2026 strongly against the dollar, with an exchange rate of 1 EUR = 1.1747 USD on January 1. But this was the highest level reached in January 2026, after the 1.16 USD at the end of 2025, driven by seasonal optimism and signals from the ECB. The rate, however, quickly fell to USD 1.1602 on January 16 due to a stronger dollar.

Monthly trend

An average of 1.1668 EUR/USD was recorded in the first fortnight of January, with a month-on-month drop of 1.24%, but a year-on-year gain of 12.88%. Let's wait and see what the second half of January has in store for us.

(MP/©The Global Money/Illustration: Dimitri Karastelev via Unsplash)