EUR/USD climbed to its highest level in nearly two weeks at 1.0700 on Monday. But the pair could edge lower toward 1.06 today, in the view of economists at ING.

European hawks in focus

“Helping EUR/USD yesterday were comments from ECB ultra hawk, Robert Holzmann, that the ECB should deliver four more 50 bps rate hikes. ECB Chief Economist Philip Lane tried to calm things down by suggesting the ECB should not go onto autopilot after what should be a 50 bps hike this month. But the market is more sensitive to the hawks given the sticky inflation data.”

“We do not see any ECB speakers scheduled today. Powell's testimony should dominate today and might nudge EUR/USD back to the lower end of the 1.0600-1.0700 range.”