It ranks over 1,100 in key US data – ING

As discussed in the US Dollar (USD) section above, there is likely a narrower path at this stage for pro-cyclical currencies to benefit from a weaker US macro story, notes Francesco Pesole, FX Strategist at ING.

The US data report is awaited

“While we would favor JPY and CHF in this environment, the euro should continue to benefit from its liquidity conditions in a defensive risk environment and outperform higher beta currencies. In other words, we are not as concerned for EUR/USD as we are for AUD/USD or NZD/USD that a softer US macro environment may have a net negative impact due to weaker equities and Fed pricing which is already proven.”

“Our preference remains for EUR/USD to hold above 1.1000 in tomorrow’s US ISM services and Friday’s payrolls. If we are right about a weaker payrolls figure, then we should see it pull back above 1,110 by the end of the week.”

“The euro zone calendar is not very inspiring today. There are some final PMI readings for the August and July PPI data for the Eurozone, which normally do not have a major impact on the market. From the ECB side, we will hear from Francois Villeroy, who is generally considered neutral on the hawk-dove spectrum.”