EUR: Consensus cut, no guidance by ECB – ING

We expect a 25bp rate cut by the ECB today. Consensus is unanimous, and markets are fully pricing in the move, so the impact on the euro may prove limited, ING's FX analyst Francesco Pesole notes.

Tactical target for EUR/USD is at 1.15

"We don’t expect much in terms of guidance by the ECB, which could echo Wedndesday’s Bank of Canada communication: openly acknowledge policymakers are as confused as markets on the tariff impact, and they are not able to offer any forward-looking view at this stage."

"In the current state of things, the FX market is not looking much at short-term rate differentials. If it did, EUR/USD should be trading well below 1.10. While we cannot exclude the possibility that markets can take the opportunity of an ECB cut to take profit in crowded EUR longs, the news from the US is still hitting the dollar, and the highly liquid euro remains in a prime position to benefit from the rotation."

"We retain a tactical target at 1.15 in EUR/USD, with risks of even larger gains. By the end of the quarter, we expect selling pressure on USD to have moderated, and we target 1.14, followed by a dollar recovery in the third quarter."