Eurozone July PMI data was not particularly encouraging and showed manufacturing – particularly in Germany – dragging down composite PMI numbers. This will reinforce the European Central Bank's view that short-term economic risks lie to the downside, ING’s FX strategist Chris Turner notes.

EUR/USD is set to head back towards 1.0900

“Look out for ECB President Christine Lagarde speak at 5:00pm CET. It seems the direction of travel here is for two further ECB rate cuts in September and December.”

“In terms of rate differentials, we see scope for further narrowing in the EUR/USD two-year rate spread, which means EUR/USD could head back towards 1.0900 if the Federal Reserve (Fed) easing narrative dominates today.”