EUR/USD has briefly traded below 1.0500, sitting at the lowest level since January 2017. A clear break under this level would open up the 1.0350 area, economists at ING report.

35% chance priced of EUR/USD hitting parity this year

“The FX options market assigns a 35% probability to EUR/USD trading 1.00 at any time before year-end. This is up from 25% earlier this week and just 15% a couple of weeks ago.”

“Of the many concerns facing European currencies, the most pressing is an abrupt cut-off in Russian gas more broadly in Europe. How this story plays out and the degree to which the eurozone economy is hit (estimates range in the 1-3% of eurozone GDP on a complete cut-off) will help determine EUR/USD levels.” 

“EUR/USD remains fragile and a clean break of 1.0500 opens up the 1.0350 area.”