EUR/USD is now left with an ever-unfavourable rate differential – ING

The ECB meeting proved to be a non-event, and EUR/USD is now left with an ever-unfavourable rate differential, economists at ING report.

Downside risks after a non-eventful ECB

It is clear now that the Euro will not be able to draw any substantial benefit from a more hawkish ECB, and markets have all the reasons to keep rate expectations depressed on the back of the deteriorating growth outlook.

With Eurozone data unlikely to turn materially stronger in the near term, and rate/growth differentials pointing south, we retain a short-term bearish bias on EUR/USD.