EUR/USD reached its highest level in a month above 1.0700. In the view of economists at ING, the pair is biased to the 1.0780/1.0800 zone.

Spreads narrow markedly in favour of EUR/USD

“The dramatic re-pricing of the Fed policy curve has seen two-year EUR:USD swap rate differentials narrow inside 100 bps – the narrowest since October 2021. This is EUR/USD positive.”

“Unless there is a massive rally in US banking stocks today which suggested that US authorities had been incredibly successful in putting the genie of US banking sector risk back in the bottle, we would say EUR/USD is biased to the 1.0780/1.0800 area.”