Economists at ING had pointed to the third quarter as the period where the Dollar would decisively turn lower. Now in July, they see a prolonged pause in the Dollar decline.

The Dollar downtrend remains on hold

We have to acknowledge that it may still be too early for the Dollar to take a decisive and sustainable turn lower this summer.

Our rates team believes a drop in short-term USD rates now looks more likely to be a fourth-quarter and early-2024 story, which means EUR/USD could mostly bounce around the 1.08-1.10 range this summer, without a very clear sense of direction, before taking a decisive turn higher to 1.15 by year-end.