Euro: Mid-range trading with capped upside against US Dollar – ING

As of mid-September, the Euro has been trading within a mid-range against the US Dollar since April, according to ING's Chris Turner. The decline in the Euro's terms-of-trade has been a contributing factor to its relative strength. Turner expects a dovish move from the European Central Bank (ECB) that falls short of the additional tightening already priced in by the markets.

The Eurozone calendar is currently relatively quiet, which doesn't provide strong grounds to overtake the 1.1640/45 resistance level. Instead, a target of 1.15 by the end of September seems more plausible, given the expectation of a US Federal Reserve (Fed) rate hike.

In contrast to the prevailing market sentiment, Turner is more inclined towards a dovish ECB hike or at least one that doesn't further tighten monetary policy by an additional 50 basis points, as anticipated after the Fed's expected 25 basis point increase on Thursday.

Regarding the US Dollar, AUD/USD has steadied around the mid-0.7100s on Friday, amidst a week of declines. The Australian Dollar's performance has been influenced by the US Dollar's gains, which were fueled by hawkish expectations from the Reserve Bank of Australia (RBA). However, the US Dollar's upward movement has been tempered by hawkish language from the Reserve Bank of Australia (RBA).

USD/JPY has been under pressure, hovering near 154.00, following robust Japanese Producer Price Index (PPI) data that has bolstered the Japanese Yen. Nevertheless, downside risks appear limited, as the US Dollar's advances continue ahead of the upcoming US consumer inflation data.

Meanwhile, gold has demonstrated resilience, trading near $4,440 per ounce troy on Friday, marking a turnaround from Thursday's decline. The precious metal has regained focus amid the fluctuating movements of the US Dollar throughout the week.