ING analysts see the euro consolidating near 1.17 USD amid broad dollar softness and expectations of further ECB tightening.
EUR/USD climbed as the dollar softened, supported by expectations of mild eurozone growth and persistent inflation. August PMIs are forecast to show continued expansion, reinforcing bets for another European Central Bank rate hike in September.
Three-year inflation expectations in the ECB’s Consumer Expectations Survey remain elevated at 2.8%, up from 3.0% in March. Analysts anticipate the pair will trade in a tight 1.1670-1.1710 range before potential further gains.
Risks include high natural gas prices, while emerging market currency strength may also support the euro’s gradual rise. Fiscal policy shifts in the U.S. could further weigh on the dollar if consolidation emerges.