EUR/USD is now not far from its late November lows of 1.1185. Economists at ING forecast the world’s most popular currency pair at 1.08 by the end of the second quarter.

Euro to bear the brunt of tension in Ukraine

“So far the ECB is firmly sticking to the script that the bump in inflation will not hurry them into hiking. Until something substantially changes here, expect EUR/USD to stay under pressure.”

“We retain a 1.10 target for the end of 1Q22 and a 1.08 target for the end of 2Q22.”

“In addition, one would expect European currencies to bear the brunt of tension in Ukraine. The prospect of disruption to energy supplies or at least a further surge in prices will hurt European industry and the consumer – and favour the geography and energy independence of the dollar.”