Euro Looks Cheap Near 1.1570, ING Says

ING's foreign exchange analysts believe that the Euro-Dollar (EUR/USD) is undervalued near 1.1570, with a short-term fair value estimate of 1.1600-1.1650.

The bank's strategist, Francesco Pesole, stated that 'our models suggest EUR/USD's short-term fair value sits in the 1.160-1.1650 area.'

This assessment is based on a 10 basis point tightening in two-year swap spreads, which ING believes will keep the Euro-Dollar exchange rate leaning bullish.

However, Pesole cautioned that the Euro lacks a catalyst to break decisively through 1.1600 and noted that Federal Reserve communication may be necessary to prompt a larger FX move.