The Euro to US Dollar exchange rate (EUR/USD) edged lower and closed in negative territory at around 1.0650 on Tuesday. Despite this, economists at ING remain optimistic for the pair and expect it to move back higher toward 1.0700-50 before the weekend.
The economists at ING believe that the current support around 1.0640-1.0660 is encouraging and should be enough to fuel a move back to 1.0700-50 before the weekend. This is due to the strength of the Dollar against other pro-cyclical currencies.
However, the economists also warned that a hawkish surprise in the Federal Open Market Committee (FOMC) minutes and/or more geopolitical risk being priced in could put the 1.0600 support at risk. Therefore, it is essential that these two risks are monitored closely.
The economists at ING are optimistic for the Euro to US Dollar exchange rate due to an expected good Ifo reading in Germany today and an overall stabilisation in sentiment. An Ifo reading is a survey conducted by the Ifo Institute for Economic Research in Germany to measure the current economic climate and business sentiment.
The Euro to US Dollar exchange rate is a popular currency pair and is heavily traded by investors and speculators alike. This is due to the US Dollar being the world’s reserve currency and the Euro being the second most traded currency. The pair is also influenced by a variety of macroeconomic factors such as interest rates, inflation, and economic growth.
The Euro to US Dollar exchange rate is an important indicator of the health of the global economy as it reflects the relative strength of the two currencies. Therefore, it is essential that investors and speculators monitor the pair closely in order to make informed decisions.
Overall, the economists at ING remain optimistic for the Euro to US Dollar exchange rate and expect it to move back higher toward 1.0700-50 before the weekend. This is due to the strength of the Dollar against other pro-cyclical currencies, an expected good Ifo reading in Germany today and an overall stabilisation in sentiment. However, it is essential that investors and speculators monitor the pair closely and be aware of any hawkish surprises in the FOMC minutes and/or geopolitical risks that could put the 1.0600 support at risk.
