EUR/USD is trading near 0.9630. Economists at BBH expect the pair to dip under 0.9555 towards the psychological 0.90 mark.

ECB President Lagarde is sounding less hawkish

“EUR/USD made a new cycle low yesterday near 0.9555. It should test that low soon and move on to the target at the psychological 0.90 level.”

“Lagarde said that the bank will consider Quantitative Tightening (QT) once interest rate normalization is completed. We think the ECB is being more cautious because it has to worry about fragmentation risks. Bottom line: a bit more dovish than anticipated. Lastly, Lagarde pledged that Outright Monetary Transactions  (OMT or QE) is available if its Transmission Protection Instrument (TPI) fails. This is not exactly a strong vote of confidence in its newly created TPI.”