Euro: Range-bound before FOMC against US Dollar – ING
Chris Turner at ING describes EUR/USD as contained after a rally stalled just above 1.16, with investors cautious due to high natural gas prices and upcoming FOMC minutes. He expects a 1.1520–1.1580 range near term, while higher energy supports ECB hike expectations.
Eur/Usd remains range-bound near 1.16, with traders holding off on pushing the pair higher due to rising energy costs and upcoming FOMC minutes. Analysts at ING forecast the exchange rate to hover between 1.1520 and 1.1580 in the near term, expecting a 1.17 mark by the end of September and 1.18 by year-end. Despite recent positive economic news from the eurozone, the year's high natural gas prices create caution.
Higher energy prices bolster expectations of a 25 basis points rate hike from the European Central Bank in September, with another potential 25 basis points increase by early next year still up for grabs. EUR/USD is expected to trade within the 1.1520-1.1580 range today. Market participants are also being wary of weak UK labor data and geopolitical tensions in the Middle East, which are contributing to a bearish sentiment around the GBP/USD pair.
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