EUR/USD: The meeting of EU energy ministers may prove bearish for the euro – ING

EUR/USD price action after a hawkish European Central Bank (ECB) session on Thursday proved very underwhelming. Economists at ING expect the EU energy ministers' meeting to add further downside pressure on the shared currency.

Hawkish ECB provides little support

“Short-dated yields moved in the euro’s favour, but to no avail for the currency. In addition, when asked about the weak euro, President Christine Lagarde had little to say beyond the ECB being attentive.” 

“It seems growth differentials and the international investment environment are dominating the FX environment right now – neither of which are supporting the euro.”

“The meeting of EU energy ministers may prove bearish for the euro for a number of reasons. For example, reaching an agreement on gas price caps, gas sharing and electricity levies look to be difficult and may be delayed. Mandatory electricity reduction could spark what the Belgium PM calls de-industrialisation and social unrest. There is also the risk that if Russian oil and gas caps are approved, Russia could immediately suspend the remaining oil and gas shipments coming into the EU.”

“With the Fed remaining hawkish, expect EUR/USD to stay offered in a broad 0.9900-1.0100 range.”