ING Bank: Interest rate path differences support the rise of the Euro/US Dollar pair.

Francesco Pesole, a foreign exchange strategist at ING Bank, stated that based on the short-term interest rate differentials between the US and Europe, the euro should be higher against the US dollar. He believes that the Fed's rate cuts could be larger than the market's current expectations. Market expectations for future rate cuts by the Fed are much greater compared to the European Central Bank, so in the coming months, the euro may rise against the US dollar. He said, "We still believe that the euro will return above 1.17 against the US dollar." Data shows that the US money markets have fully priced in expectations of two 25 basis point rate cuts by the Fed this year, while the eurozone money markets only anticipate a 30% chance of a rate cut by the ECB before the end of the year.