EUR: Upside risks persist – ING

EUR/USD is set for a return above 1.170, ING's FX analyst Francesco Pesole notes.

EUR/USD to remain moderately bullish for the coming months

"As discussed above, markets might not go too aggressive on a Fed dovish repricing (unless US jobs figures are particularly bad), but there is already enough in short-term rate differentials to justify a higher EUR/USD."

"Our economics team has published a preview of next week’s ECB meeting: we expect a hold, in line with consensus and pricing, but still think the chances of another rate cut later this year are underestimated by markets."

"As our Fed call is also more dovish than markets – and given the much larger room for dovish rerating in the USD OIS curve relative to the EUR one – our call remains moderately bullish on EUR/USD for the coming months."