EUR/USD to rise sustainably in H2 toward 1.15 by year-end.

A further Dollar decline looks likely this year, although economists at ING suspect this is more a story for the second half when the Fed can declare that the inflation battle is won.

A case of when, not if the Dollar declines

“The collapse of two regional banks in the US has seen the Fed take action to address financial stability, while at the same time tightening rates to address monetary stability. We expect these two positions to collide in the second half of this year, where tighter credit conditions and greater evidence of a hard landing could see the Fed cut rates 100 bp in 4Q23. It is a question of when not if the Dollar declines.”

“We favour a 1.05-1.10 range over coming months. But the European financial sector looks better positioned than the US. Higher for longer European Central Bank rates target EUR/USD at 1.15 by year-end.”

EUR/USD clings to gains above 1.0900 ahead of Fedspeak

EUR/USD continues to trade in positive territory slightly above 1.0900 on Tuesday following the mixed macroeconomic data releases from the Eurozone. As investors await comments from Fed officials, the US Dollar stays on the back foot, supporting the pair.

EUR/USD News

GBP/USD retreats from daily highs, holds above 1.2400

GBP/USD has lost its traction after having climbed to 1.2450 and erased a portion of its daily gains. The pair, however, manages to stay in positive territory above 1.2400 as the US Dollar struggles to gather recovery momentum ahead of Fedspeak.

GBP/USD News

Gold consolidates daily gains near $2,000

Gold price has lost its bullish momentum and declined toward $2,000 heading into the American session. Following the earlier decline, the 10-year US Treasury bond yield recovered above 3.4%, making it difficult for XAU/USD to continue to stretch higher.