Analysts at TD Securities say that given the dovish tone from ECB members lately, and their view that the Fed is about to begin an easing cycle, they are now looking for the ECB to ease further through more forceful forward guidance in July, and 10bps deposit rate cuts in September and December.

• “Our more dovish outlook for the ECB may not be positive driver for the currency, we think the USD will suffer more from the aggressive Fed policy path we expect.
• With EURUSD holding above its 200-dma, we have grown more confident that our year-end target of 1.18 will be achieved - possibly sooner than we expect.”