According to ING’s Chris Turner, the EUR/USD currency pair tested the 1.1500 level following a hawkish Federal Open Market Committee (FOMC) meeting, but there appears to be limited appetite for the euro to fall significantly below this point at present. ING identifies the 1.14/1.15 range as the likely floor for EUR/USD during the summer, based on the bank’s expectation that the Federal Reserve will not implement further interest rate hikes [1].
Attention is now focused on upcoming European Central Bank (ECB) decisions, with uncertainty over whether the ECB will choose to hike rates in its July or September meetings, or potentially refrain from hiking altogether. The outcome of these decisions is expected to play a pivotal role in determining the euro’s direction in the near term [1].
In addition, ING notes that the Swiss National Bank (SNB) is expected to maintain a neutral stance, remaining on a prolonged pause. This, combined with higher global rates following the FOMC meeting and possibly positive developments in the Middle East, could create slight upside risk for the EUR/CHF pair, with a potential move back toward the 0.9250 area [1].
CONCLUSION
The euro’s recent resilience at the 1.14/1.15 range is attributed to expectations of no further Fed hikes and upcoming ECB policy decisions. Market participants are closely watching the ECB’s next moves, while a neutral SNB and higher global rates may support the euro against the Swiss franc in the short term.