Via an ING note on the euro and European Central Bank, analysts at the bank say much more of a move higher is premature.

In brief:

  • euro is lagging other pro-cyclical currencies in the G10 (excluding the US data-dependent CAD)
  • euro has the lowest three-month correlation with two-year USD swap rates
  • a move to 1.1000 seems premature given the still sticky inflation picture in the US
  • European Central Bank ... A June cut is fully priced in and a near guarantee at this stage, but latest eurozone data suggests data-dependency will be a more likely message from ECB President Christine Lagarde as opposed to dovish guidance


Reminder, the European Central Bank June meeting is on the 6th:

ecb dates 2024