Euro exchange rate today 5/20/2025: EUR/USD increases sharply on expectations of EU-UK trade deal

World EUR/USD exchange rate today May 20, 2025

On the international market, the euro recorded trading at 4:30 a.m. at 1.1250 USD/EUR, up 0.0086 VND compared to the closing price yesterday (May 19).

The main driver of the rally came from the weakening of the US dollar (USD), as the market reacted negatively to Moody's downgrading the US sovereign credit rating from Aaa to Aa1.

Moody's decision comes amid growing US fiscal stress and the lack of clarity from the government. The downgrade has triggered a negative reaction in financial markets, sending the US dollar index (DXY) to a multi-week low of nearly 100.20.

The apparent result was a sharp 2.3% jump in the yield on the 10-year US government bond, reaching around 4.54%, suggesting investors demand a higher risk premium to hold US debt. Some analysts also expressed concern that the White House's further spending policies, including the "big beautiful bill", could continue to put pressure on yields and the dollar.

Despite the pressure on the dollar, the market still saw some slight support from the US government. President Donald Trump said in an interview with Fox News that he was willing to travel to China to negotiate directly with President Xi Jinping, raising hopes of a new trade deal between the world's two largest economies.

In addition, White House economic adviser Kevin Hassett also made an optimistic statement, saying that many new trade agreements could be signed this week, although he did not specify specific partners.

On the monetary policy front, the market is not expecting the Fed to cut interest rates at its next two meetings, due to expectations of high consumer inflation following new tariffs imposed under President Trump.

Atlanta Fed Governor Raphael Bostic said the Fed is prioritizing controlling inflation over concerns about the job market. “We see more risks to higher inflation than to employment right now,” he said in an interview with CNBC.

EUR/USD Rises as Euro Benefits from Trade Deal Prospects and Softer ECB Rate Policy

One of the highlights is the news of a potential trade deal between the European Union (EU) and the United Kingdom (UK). This would be the first extensive cooperation agreement since Brexit, expected to cover important areas such as defense, agriculture and energy.

The improvement in economic relations between the two major European economies comes as inflation in the eurozone cools and the German economy begins fiscal reform. This creates more confidence in the region's sustainable growth prospects, strongly supporting the euro in the international market.

On the monetary policy front, European Central Bank (ECB) officials have increasingly signaled their willingness to ease further. Belgian Central Bank Governor Pierre Wunsch said interest rates could fall below 2% amid easing inflationary pressures. He warned that US tariffs had shifted the risk to the downside, but also said the ECB had no plans for “unusual” rate cuts in the short term.

The ECB is expected to make at least one more interest rate cut, aiming to boost economic growth while keeping inflation in check.

The euro was also supported by positive signs from trade talks between the EU and the US. EU Trade Commissioner Maroš Šefčovič said the EU plans to buy more gas, weapons and agricultural products from the US to reduce the trade deficit and improve bilateral relations.

However, analysts at Capital Economics are cautious, saying progress on reaching a deal remains slow due to a lack of US interest and the lack of consensus within the EU among the 27 member states. This may slow short-term expectations but should not overshadow the positive outlook for the euro.

Domestic Euro exchange rate today 5/20/2025

* The euro exchange rate at the State Bank's buying and selling exchange center increased slightly, currently at: 26,549 VND - 29,344 VND.

Survey at 4:30 on the black market, the euro was traded around 29,176 VND/EUR, unchanged from yesterday.

At 4:30 a.m. today, May 20, the euro exchange rate increased at most banks.

Of which, Vietcombank is trading the euro at the buying and selling rates of 28,269 VND/EUR and 29,818 VND/EUR, down 24 VND - 25 VND respectively.

VietinBank traded the buying rate at 28,076 VND/EUR and the selling rate at 29,786 VND/EUR, up 465 VND - 10 VND respectively.

BIDV Bank traded buying and selling rates at 28,679 VND/EUR and 29,923 VND/EUR, down 115 VND - 119 VND respectively.

Meanwhile, Eximbank is buying euros at 28,712 VND/EUR and selling at 29,698 VND/EUR, down 181 VND - 186 VND respectively.

Techcombank's buying and selling exchange rates decreased by 256 VND - 169 VND, equivalent to 28,586 VND/EUR and 29,880 VND/EUR.

The buying and selling rates of foreign currencies at Sacombank are 28,857 VND/EUR and 29,730 VND/EUR, down 208 VND - 206 VND respectively compared to the previous update.

Only, HSBC bank is trading with the buying rate at 28,469 VND/EUR and the selling rate at 29,509 VND/EUR, up 62 VND - 64 VND at the time of update.

According to the survey, the buying rate of Euro at banks is fluctuating between 28,298 - 28,688 VND/EUR. On the selling side, the exchange rate fluctuates between 29,549 - 29,865 VND/EUR.

Among the surveyed banks, Sacombank has the highest buying rate, Eximbank has the lowest selling rate.