EUR/USD is range-bound around 1.1400, BBH FX analysts report, BBH FX analysts report.

Bessent's remarks highlight pressure on ECB policy

"Yesterday, US Treasury Secretary Scott Bessent said he expected the ECB to cut rates 'to get the Euro back down'. The ECB does not target the exchange rate as a policy goal. However, the exchange rate plays an important role in achieving the ECB’s primary objective of price stability over the medium term."

"From that perspective, the recent appreciation in EUR will further cool inflation in the Eurozone and support the case for additional ECB policy rate cuts. The swaps market price-in a total of 66bps of ECB easing over the next 12 months that would see the policy rate bottom between 1.50% and 1.75%."

"Overall, EUR/USD has likely entered a short-term period of consolidation after overshooting the levels implied by nominal and real EU-US 2-year bond yield spreads."