Our predicted EUR/USD 1.0500-1.1250 range for Q2 looks valid again.

In 2023 the market has seen countervailing forces face off in EUR/USD. On the one hand, a hawkish ECB amid continued core inflation risk in the Euro-area have underpinned the EUR. On the other, the USD keeps benefiting from markets having underestimated inflation persistence and economic resilience in the US, alongside a continued carry premium. 

As Euro-area data start to soften, we expect the pair to gravitate to the lower end of this range.