# The one interest rate differential that is driving the US dollar | ING THINK

> ING argues that the gap between neutral interest rates (r-star) in the Eurozone and the US may explain EUR/USD better than current rate spreads. The analysis notes that the dollar has decoupled from rate differentials and may be entering a regime change. Its estimates are based on data released with a lag.

- Date: 2018-02-26 · published 2018-02-26T12:00:00.000Z
- Category: macro · region Global · magnitude low
- Page: https://feedsoft.ai/events/66696-the-one-interest-rate-differential-that-is-driving-the-us-dollar-ing-think
- Commodities: [US Dollar (Broad)](https://feedsoft.ai/c/DXY.md), [Euro (USD per EUR)](https://feedsoft.ai/c/EURUSD.md)

## Why it matters

If the neutral-rate gap drives the dollar, the currency's direction over coming months becomes harder to call, which adds uncertainty to US commodity export pricing. The effect on feed prices is indirect and depends on how the Fed's end-point is priced.

## Read by commodity

- DXY: neutral
- EURUSD: neutral

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| DXY | 2017-01-26 | [Are Interest Rates No Longer Driving the Dollar? - BBH — Octa](https://feedsoft.ai/events/73136-are-interest-rates-no-longer-driving-the-dollar-bbh-octa.md) | -0.5% | -1.1% |
| DXY | 2022-11-23 | [Euro vs US dollar: Long-term uncertainty amid interest differential](https://feedsoft.ai/events/38895-euro-vs-us-dollar-long-term-uncertainty-amid-interest-differential.md) | -0.6% | -1.6% |
| DXY | 2024-07-10 | [Why the Fed cutting interest rates may weaken the U.S. dollar](https://feedsoft.ai/events/29459-why-the-fed-cutting-interest-rates-may-weaken-the-u-s-dollar.md) | -0.6% | +0.2% |
| DXY | 2026-01-30 | [US Dollar Weekly Forecast: The Fed is seen reducing rates twice in 2026](https://feedsoft.ai/events/21241-us-dollar-weekly-forecast-the-fed-is-seen-reducing-rates-twice-in-2026.md) | +0.9% | +0.3% |
| DXY | 2024-03-01 | [FX: A dollar decline is delayed, not deterred \| ING THINK](https://feedsoft.ai/events/31396-fx-a-dollar-decline-is-delayed-not-deterred-ing-think.md) | -0.8% | -0.1% |
| EURUSD | 2022-11-23 | [Euro vs US dollar: Long-term uncertainty amid interest differential](https://feedsoft.ai/events/38895-euro-vs-us-dollar-long-term-uncertainty-amid-interest-differential.md) | +0.5% | +3.1% |
| EURUSD | 2025-09-11 | [Traders raise bets that the ECB is done cutting rates \| Reuters](https://feedsoft.ai/events/23093-traders-raise-bets-that-the-ecb-is-done-cutting-rates-reuters.md) | +1.1% | -0.9% |
| EURUSD | 2021-09-02 | [Rates Spark: Convergence or divergence \| ING THINK](https://feedsoft.ai/events/45268-rates-spark-convergence-or-divergence-ing-think.md) | -0.2% | -2.3% |

## Sources

- think.ing.com: https://think.ing.com/articles/the-one-interest-rate-differential-that-is-driving-the-us-dollar/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.