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EUR: Tariff risks look under-priced – ING

After a violent first half of the month, the EUR/USD market is calming down. One-month traded volatility has fallen to 7% from 9%, and one week has fallen to below 8% from above 11%, ING’s FX analysts Chris Turner notes.

EUR/USD can be dragged to 1.0730 in the near term

"Stability in US asset markets has certainly helped, as has a rethink about how quickly new fiscal stimulus or defence spending stands to lift eurozone growth. Notably, during all this month's volatility, the market still prices the landing rate for the ECB easing cycle in the 1.75-2.00% zone – i.e. there has not been a substantial upward revision here."

"We do, however, think that financial markets are under-pricing the risk to the euro from next week's tariff news. The EU (led by Germany) runs a large trade surplus with the US and will likely, alongside China, be at the forefront of Washington's reset on global trade. We've got a 1.05 forecast for EUR/USD by the end of the second quarter on the back of the tariff story."

"EUR/USD has support at 1.0765/70 and could be dragged to 1.0730 if the pound weakens."

EUR/USD has a chance to pull back further toward 1.0725 – UOB Group

Euro (EUR) is likely to trade in a 1.0765/1.0820 range. In the longer run, EUR could pull back further; it does not appear to have enough momentum to break clearly below 1.0725, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
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GBP: Tighter fiscal, looser monetary policy to hit sterling – ING

UK Chancellor, Rachel Reeves, delivers her 30-minute Spring Statement at 13CET.
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