EUR/USD Stabilizes Near 1.1600 as Dovish ECB Outlook Shifts Focus to Fed Tightening

The EUR/USD exchange rate has stabilized around 1.1600, near its midpoint since April, despite a decline in the euro's terms of trade.

ING expects the European Central Bank to raise interest rates by 25 basis points but views this as dovish and insufficient to justify further tightening.

With a quiet Eurozone economic calendar, ING sees limited reason for the EUR/USD rate to break through resistance at 1.1640-45, potentially leading to a move towards 1.1675-80.

ING's target is an end-of-September price of 1.15, driven by an anticipated Federal Reserve hike.