EUR/USD can drop back to the 1.0850 area – ING

Thursday's FX focus will be on the ECB. Here economists at ING see some downside risks to the Euro (EUR).

Three things to watch at the ECB meeting

For the ECB meeting, we identify three factors to watch: staff projections, communication and the conditionality for a June cut. If we were to pick from these the key drivers of the market, we would identify the ECB shifting to a balanced risk position on inflation and/or bringing forward the timing of a return to the 2% target (currently 3Q25). 

We, therefore, see some downside risks to the Euro today. This can drag EUR/USD back to the 1.0850 area.