EUR: Lots of central bank activity in Europe today – ING

EUR/USD can probably correct a bit further from here on geopolitical risks, and the near-term target is 1.140, and explorations below that level can be justified even without new big spikes in oil prices. That said, geopolitical events tend to be temporary drivers for FX unless they trigger long-lasting effects on commodity prices. So, there must be plenty of interest in buying the EUR/USD dips at the first signs of de-escalation, ING's FX analyst Francesco Pesole notes

European banks are talking

"Aside from speeches by ECB President Christine Lagarde and other Governing Council members today, the eurozone calendar is empty. However, there is plenty of action in the rest of Europe, with central bank meetings in Norway and the UK."

"In Norway, Norges Bank will likely keep rates on hold, as markets price in no chance of a move today. Policymakers are taking some risk in continuing to delay easing, and that a cut in August would be appropriate. However, the new spike in oil prices means the new projections may not signal a move before September – which is fully priced in. EUR/NOK may remain capped on a still hawkish tone."

"The Bank of England will almost certainly keep rates on hold, in line with consensus and market pricing. There could be more than one dissenter voting for a cut, but the overall guidance should remain broadly unchanged, roughly endorsing market expectations for two more cuts by year-end. The risks are however slightly on the dovish side given the recent slew of soft UK data, and we remain bullish on EUR/GBP in the near term."