Will this be the week when EUR/USD hits parity? The chances are quite high, in the view of economists at ING.

Parity inches closer

“We struggle to see EUR/USD rapidly inverting its recent bearish trend this week. Most key drivers of the pair’s recent weakness (risk sentiment, Fed-ECB divergence, to name two) don’t look highly likely to improve just yet, and the lingering concerns about a reduction in Russian gas flows to the EU should continue to keep the euro rather unattractive.”

“There has been much discussion about EUR/USD hitting parity and given the lingering downside risks highlighted above, the chances of this happening as early as this week are quite high.”