ING: Interest rate differential changes may put further pressure on EUR/USD to decline

Golden Ten Data reported on May 22 that Chris Turner, an analyst at ING, stated in a report that as the interest rate differential between the US and the Eurozone may further move in a direction unfavorable for EUR/USD, the currency pair could see a deeper decline. He noted that Thursday's weak Eurozone Purchasing Managers' Survey has raised questions about how much more the European Central Bank can hike rates. Meanwhile, there is growing market speculation on further Federal Reserve rate hikes. "We believe that if EUR/USD falls below 1.1575, it could test 1.1500 again. Likewise, any progress in Middle East peace talks may limit any corrective rebounds around 1.1660/90, as the impact of the energy shock is expected to persist for the coming months."