The recent rally of EUR/USD significantly benefits from real money flows as investors engage in hedging against the dollar. This strategic move occurs in light of anticipated easing from the Federal Reserve, coupled with a slowdown in US economic growth. Furthermore, the ECB’s decision to reduce interest rates to 1.75% may exert additional influence, limiting extensive gains for the Euro. ING’s FX analysts, Francesco Pesole and Chris Turner, emphasize the importance of monitoring market volatility within the 1.12 to 1.16 range.

These dynamics are critical for traders to assess how the Euro will perform against the US Dollar, especially considering the forthcoming economic announcements.