EUR/USD set to dip towards the 1.09 mark amid renewed energy prices concerns – ING

The US dollar is set to see some benefits from new energy-related tensions, Subsequently, economisst at ING expect the EUR/USD pair to slump towards the 1.09 level.

A move to 1.09 on the cards

“We think downside risks should prevail today for EUR/USD, given the resurgence of Russia-related risk premium on energy prices and the longer-term policy divergence/growth story.” 

“Data-wise, we’ll take a look at the eurozone’s PMIs, which may have weakened on the back of geopolitical events and high energy costs. While the FX impact should not be sizeable, it will likely endorse the market’s recent repricing of the eurozone’s growth expectations.”

“We still expect a move to 1.09 in EUR/USD by the end of the week, with any decision among EU countries to reduce exposure to Russian commodities that could weigh on the common currency.”