As the World Economic Forum (WEF) in Davos kicks off, economists at ING analyze the outlook for EUR/USD, focusing on remarks expected from European Central Bank (ECB) President Christine Lagarde.
Despite minimal impact from ECB hawks’ protests against dovish expectations, the presence of multiple ECB speakers at the WEF event, including President Lagarde, could influence the market sentiment.
The analysts suggest that Lagarde, with a clearly divided Governing Council, might adopt a more hawkish tone compared to her previous week’s comments. While there is potential for Euro support from Davos, caution is advised, as market expectations, similar to those with the Federal Reserve, may remain resistant to data.
In addition to Davos, the release of minutes from the December policy meeting is anticipated this week, further shaping the trajectory of EUR/USD. ING maintains the view that it is premature for the currency pair to trade sustainably above 1.10.