Euro: Stabilising above 1.1300 against US Dollar with risk driver – ING

ING’s Francesco Pesole says calmer markets are allowing the Euro (EUR) to pause against the strong US Dollar (USD), with AI-related sentiment now the main driver for EUR/USD. He expects that if risk stabilisation continues and equities firm, the pair could slowly return toward 1.1400. ING’s baseline view is that EUR/USD holds above 1.1300, conditional on steady risk sentiment.

Euro pair seeks firmer technical base

"Calmer markets are allowing several currencies to take a breather against the strong dollar. If sentiment keeps stabilising from here, data and Fedspeak should take over as primary drivers. Today, we expect decent US spending figures, but a muted core PCE. Our baseline view is that EUR/USD won’t break below 1.1300"

"EUR/USD is stabilising after a long sell-off, with AI-related sentiment now being the primary driver of the pair. Further stabilisation in equities could see a slow return to 1.1400."

"Domestically, the German IFO printed above consensus yesterday, offsetting Tuesday’s poor PMIs, but markets have continued to gradually scale back some ECB easing. This was in line with the move in the USD curve and a spillover from the equity turmoil, as ECB speakers have so far offered a more hawkish tone relative to Lagarde’s Monday speech."

"Our baseline view is that EUR/USD won’t break below 1.1300, but that is contingent on risk sentiment continuing to stabilise."

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