ING: EUR/USD Due for Relief as Inflation Data Looms

EUR/USD should be trading above $1.140 based on ING's models, according to Francesco Pesole, an ING FX Strategist. The strategist believes recent Euro weakness is somewhat overdone and that inflation-driven stabilisation hopes could bring some relief.

The key drivers of EUR/USD movements will be September Eurozone inflation data and ECB communication. While core inflation is expected to edge higher by 0.1 percentage points to 2.5%, Pesole doubts this will push the ECB into a more dovish stance.

Eurozone inflation data for September is due out this week, with country releases starting tomorrow and eurozone-wide numbers on Friday. Headline CPI is expected to accelerate due to energy prices, but core inflation remaining steady suggests there's no sign of second-round effects.