It has been a relatively quiet start to the year in FX markets. Economists at ING analyze the EUR/USD outlook.

EUR/USD seen ending the year at 1.1500

Doubts about the timing and speed of central banking easing cycles have contributed to lower levels of volatility and a search for yield.

Assuming the Fed is preparing to cut rates in May/June, the bullish steepening of the US curve should be positive for most activity currencies – including the Euro. 

We still forecast EUR/USD ending the second quarter somewhere near 1.1000 and ending the year at 1.1500.