ING: Expected to rise above 1.17 for Europe and the US.

On September 5, Jin10 reported that Francesco Pesole, a forex analyst at ING, pointed out that the latest survey of European Central Bank forecasters shows that market expectations have clearly shifted towards a hawkish stance. However, for the EUR/USD pair, the trend still almost entirely depends on Fed policy and U.S. data. We expect this currency pair to rebound above 1.1700. In the coming days, any developments in French political dynamics and the situation in Ukraine will remain another important factor influencing the euro. The market expects the French parliament to pass a vote of no confidence against Prime Minister Borne on Monday; thereafter, a realistic scenario is that President Macron will appoint a new centrist or center-right Prime Minister to push through a weakened fiscal consolidation plan. During this process, political uncertainty will remain high, but we are unsure if this will be enough to trigger uncontrolled fluctuations in French government bonds, thereby putting significant pressure on the euro—since the outcome of the vote of no confidence seems to have largely been digested by the market.