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Jun 03 - 06:55 PM

ING: EUR/USD's Potential Surge Past 1.09 on Soft US Jobs Data this Week

By eFXdata  —  Jun 03 - 03:00 PM

Synopsis:

ING anticipates EUR/USD could push through the 1.09 mark, propelled by potentially soft Non-Farm Payrolls (NFP) data from the US this week. Their analysis suggests that the European Central Bank's (ECB) probable 25bp rate cut, characterized as a 'hawkish cut,' could lend support to the euro, especially if US economic indicators show weakening.

Key Points:

  1. ECB Rate Decision: Expected this Thursday, a 'hawkish cut' by the ECB is predicted to underpin the EUR/USD, especially if accompanied by softening US data.

  2. External Factors: Developments such as S&P's recent downgrade of French sovereign debt and the upcoming European parliamentary elections could influence the euro, with potential volatility in the EUR/CHF pair due to changes in French-German bond spreads.

  3. US Economic Data: A pivotal factor this week will be the US NFP data. A weaker-than-expected jobs report on Friday could trigger a significant rally in EUR/USD, pushing it beyond the current 1.0800-1.0900 trading range.

Conclusion:

ING maintains a cautiously optimistic outlook for EUR/USD, expecting potential movement towards the upper range, contingent on a soft NFP outcome. The week's global and regional economic developments will be critical in shaping the currency pair's trajectory.

Source:
ING Research/Market Commentary

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