ING: Hawkish ECB to Limit Euro Downside vs Dollar

ING FX strategist Francesco Pesole anticipates that the European Central Bank will keep interest rates unchanged at its upcoming meeting, but deliver a hawkish hold. According to Pesole, geopolitical tensions in the Middle East and surging European natural gas prices are likely to keep hawkish voices within the ECB prominent.

This stance is expected to limit downside risk for the euro against the US dollar, even as the greenback remains broadly strong. The combination of elevated energy costs and geopolitical uncertainty may reinforce the ECB's cautious approach, providing a floor for EUR/USD.