EUR/USD remains well supported and not far off recent highs at 1.0900/0930. Economists at ING expect the pair to extend its race higher throughout the rest of 2023.

ECB hawks still pushing for a 50 bps hike in May

“ECB hawks such as Austria's Robert Holzmann suggested that a 50 bps ECB hike was 'still in the cards for May'. That would seem unlikely (a 22 bps hike is currently priced), but serves as a reminder that the ECB lags the Fed in its tightening cycle and that the ECB will be a lot slower to ease policy.”

“Overall, we suspect that the market will be reluctant to chase EUR/USD above 1.10 yet given concerns about the regional US banking system. But a higher EUR/USD certainly looks the direction of travel for the rest of the year.”