A move of EUR/USD to 1.10 looks ‘premature’

Via an ING note on the euro and European Central Bank, analysts at the bank say much more of a move higher is premature.

In brief:

• euro is lagging other pro-cyclical currencies in the G10 (excluding the US data-dependent CAD)
• euro has the lowest three-month correlation with two-year USD swap rates
• a move to 1.1000 seems premature given the still sticky inflation picture in the US
• European Central Bank … A June cut is fully priced in and a near guarantee at this stage, but latest eurozone data suggests data-dependency will be a more likely message from ECB President Christine Lagarde as opposed to dovish guidance

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Reminder, the European Central Bank June meeting is on the 6th:

This article was written by Eamonn Sheridan at www.forexlive.com.