President Christine Lagarde delivers remarks in Davos today after having reiterated the guidance for gradual cuts earlier this week, ING’s FX analyst Francesco Pesole notes.

EUR/USD is a touch away from 1.050

“That echoed what we have heard from other ECB members – even the more hawkish ones – and next week’s expected rate cut should be accompanied by a similar message that may just leave the market unfazed.”

“EUR/USD has received another small boost from Trump’s seemingly benign comments on China tariffs. The risk premium in EUR/USD has been halved from 3% to 1.5% since 9 January. We are not convinced that the gap will be entirely closed given lingering uncertainty about Trump’s trade hostility against the EU. But that China headline overnight has likely paved the way for testing 1.0500 in the coming days.”