FX Daily: Euro already prices a hawkish ECB

EUR/USD Outlook: Euro Already Prices a Hawkish ECB - Investing.com

Rates Spark: Bracing for a hawkish ECB

FX Daily: Euro already prices a hawkish ECB

The desk believes that the euro is pricing in a hawkish European Central Bank (ECB), with today's anticipated 25 basis point rate hike fully reflected in market expectations. The commentary highlights that aggressive tightening predictions for the ECB are making it difficult for the euro to rise, pointing out a current market sentiment that favors a relatively strong dollar, particularly after the muted US May CPI results. Per the full note from ing-think, with the euro trading at 1.1679, the consensus estimates reflect targets ranging from 1.1200 to 1.2000 into 2026. The upcoming May PPI data will be critical as it is expected to influence short-duration interest rate expectations in the US, potentially feeding into the dollar's bullish stance as we approach next week's FOMC meeting.

Minutes of the ECB's April meeting confirm hawkish bias