EUR: Testing the ECB's pain threshold

The EZ data calendar is fairly quiet but the focus will be on ECB talk and whether officials attempt to 'talk down' the EUR, according to analysts at ING.

Key Quotes

“Given the way the central bank has conditioned their inflation forecasts, we think that any sharp appreciation in EUR/$ beyond 1.20 – and heading closer towards 1.25 – would be nearing the ECB’s pain threshold (assuming ceteris paribus of course). More noise over the ECB’s disinflationary concerns in the near-term may keep EUR/$ upside contained to the 1.2160/70 area – which is the 50% retrace of the 2014-17 move lower.”