European Central Bank (ECB) President Christine Lagarde will deliver her remarks on the policy outlook and respond to questions from 12:30 GMT. Economists at ING expect Lagarde to reiterate the previously outlined plans for 25 bp hikes in July and September, pushing EUR/USD closer to 1.05.

No hawkish surprise unless Lagarde hints at 50 bp hike

“Given the market’s aggressive expectations on tightening, we think it will take some quite clear openness by the Governing Council to a 50bp rate hike in July to surprise on the hawkish side this week.”

“While we cannot exclude a hawkish surprise, we see a greater risk that President Lagarde will stick to her recently outlined plan for 25 bp hikes in July and September, ultimately raising the risk of some dovish repricing across the EUR swap curve; for EUR/USD this means that the balance of risks appears slightly skewed to the downside.”

A return to 1.05 in the coming weeks remains our base-case scenario.”

See – ECB Preview: Forecasts from eight major banks, ready for lift-off