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EUR: Asymmetrical upside risks ahead – ING

EUR/USD is holding near the 1.160 handle ahead of key US data, with the euro’s liquidity helping it avoid a sharp hit from the equity sell-off. So far, losses in G10 FX have been mostly confined to high-beta currencies, notably AUD and NZD, ING's FX analyst Francesco Pesole notes.

Year-end target remains at 1.180

"In our view, upside risks for EUR/USD persist. The pair has recently traded on the cheap side relative to its short-term fair value, but since French political risk faded, it has struggled to maintain an undervaluation greater than 1% for consecutive days. This morning’s model estimate puts the undervaluation at 0.8%, suggesting the upside room is asymmetrically larger than the downside heading into key US releases."

"Our year-end target remains 1.180. While the path higher may not resemble the one-way bullish traffic seen earlier this year, positive December seasonality could help smooth the move."

Pound Sterling trades with caution as markets await UK inflation data

The Pound Sterling (GBP) trades subdued against its major currency peers, except antipodeans, on Tuesday as investors turn cautious ahead of the United Kingdom (UK) Consumer Price Index (CPI) data for October, which will be released on Wednesday.
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Dow Jones futures fall due to risk aversion, Fed outlook

Dow Jones futures decline 0.30% to trade below 46,550 during European hours ahead of the opening of the United States (US) regular session on Tuesday.
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