Anna 
The World Economic Forum in Davos commenced on Monday, marking a crucial juncture for economists at ING as they delve into the prospective outlook for EUR/USD, especially in anticipation of a speech by European Central Bank President Christine Lagarde.
In the backdrop of the ECB’s internal divergence on dovish expectations, the protests by hawks have, until now, made minimal ripples in the market. However, with the World Economic Forum underway, featuring key figures like ECB President Christine Lagarde, the potential market impact cannot be overlooked.
As the Governing Council within the ECB exhibits clear divisions, analysts at ING speculate that Lagarde might adopt a more hawkish tone in her speech, a departure from the dovish sentiment conveyed in the past week. The potential influence Lagarde holds over the markets remains a focal point, given the existing internal divisions.
While Davos might offer some support to the euro, caution is advised. The Federal Reserve’s expectations have historically been swayed by data trends, and ING suggests that the ECB might follow a similar pattern. Additionally, the release of the minutes from the December policy meeting is scheduled for this week, adding another layer of complexity to the market dynamics.
Despite potential bullish signals, ING maintains a cautious stance, asserting that it might be premature for EUR/USD to sustain trading above 1.10 in the current landscape.
