EUR/USD lost more than 100 pips last week. Dollar strength is set to keep the pair heavy, economists at ING report.
Like the Fed, the ECB remains very much in hawkish mode
“Investors fully subscribe to the ECB's message of a 50 bps hike on 16 March and then price a further 80 bps of tightening into year-end. This should be the key difference between the Fed and the ECB cycles. We think the Fed could be in a position to cut by year-end, while the ECB looks likely to keep rates at their peak throughout the majority of 2024.”
“For EUR/USD, we think the strong Dollar view will dominate. Expect 1.0500 to be tested, with a chance that it briefly trades down to the 1.0460.”
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