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- EUR: 1.050 would be stretch – ING
EUR: 1.050 would be stretch – ING
For a second day in a row, EUR/USD got support from a dollar decline but fell short of the 1.0440 mark, ING’s FX analysts Francesco Pesole notes.
Markets to consolidate their expectations for four rate cuts
“There still seems to be some resistance to take the pair back to the 1.0450-1.050 mark, which would close the gap with its short-term fair value, that we currently estimate at 1.0580. In fact, 1.050 would mark a shift to essentially pricing out most of the Trump tariff risk on the eurozone. That is probably premature.”
“On domestic eurozone news, a number of European Central Bank members are speaking in Davos, including President Christine Lagarde, Francois Villeroy, Klaas Knot and Olli Rehn. Yesterday, Bundesbank governor Joachim Nagel confirmed the ECB should cut rates by 25bp next week and reiterated the widely shared view that more cuts can follow. He is generally considered among the most hawkish Governing Council members, and that was another signal there is no resistance left to the dovish front.”
“We expect today’s comments to follow the same line and markets to consolidate their expectations for four rate cuts by the ECB this year.”
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