EUR/USD to drop towards 1.10 unless heartening news of a ceasefire in Ukraine – ING

EUR/USD is edging below 1.11. Economists at ING expect the pair to pressure the 1.10 level amid increasing worries about the potential negative impact of a prolonged Russia-Ukraine war on economic activity.

ECB swings to support mode

“The ECB seems to hold the door open for continued stimulus. That is a far cry from the sequencing narrative in play only a month ago, where the market was debating the timing of the end of its APP bond-buying scheme and its first rate hike.”

“With eurozone growth potentially taking a 0.7%-1.0% hit this year from events in Ukraine, it is no surprise to see EUR/USD breaking to new lows.”

“Unless we hear any heartening news of a ceasefire in Ukraine, expect EUR/USD to drift down to 1.10 – and maybe lower.”