EUR/USD: Return to sub-1.0900more likely than a sustainable rally beyond 1.10 – ING

Today, a wide further drop in Eurozone inflation is expected. Economists at ING analyze EUR/USD outlook ahead of the Eurozone HICP report.

Eurozone inflation figures may not have a huge impact on the Euro

Eurozone’s aggregate headline inflation is seen decelerating from 2.9% to 2.7%, with the core rate moving from 3.9% to 4.2%. The implications for the Euro would probably be material only if the figures come in surprisingly higher than expected.

Lower inflation is hardly ever good for a currency and may keep the Euro’s upside room capped today, even though data from the US could cause large swings in EUR/USD regardless.