Euro: Seen holding 1.1300 against US Dollar before recovery – ING

Francesco Pesole at ING highlights that EUR/USD is seeking stabilisation around 1.1350–1.1400, with Eurozone-specific inputs secondary in the short term. He notes markets would need a major Consumer Price Index (CPI) miss or broader turmoil to reprice the remaining European Central Bank (ECB) hike. Pesole’s baseline view is that 1.1300 support should hold and EUR/USD can trade back above 1.1500 during the summer.

Stabilisation around support eyed this summer

"EUR/USD is searching for some stabilisation in the 1.1350-1.1400 area. Inputs from the eurozone should remain quite secondary for the pair in the short term."

"Markets probably need a big CPI miss next week or broader market turmoil to price out the one hike left in the EUR curve for this year. "

"Equally, the bar is set quite high to add back another hike. Most of the action in rate expectations is happening on the dollar leg, which should remain overwhelmingly dominant in EUR/USD."

"While we may not have seen the bottom in EUR/USD just yet, our baseline view is that the 1.1300 support can hold, and the pair will return above 1.1500 this summer."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)