EUR/USD has fallen back below 1.170, driven largely by renewed dollar strength as geopolitical tariff risks ease and USD bulls re-emerge, ING's FX analyst Francesco Pesole notes.

EUR/USD risks extend toward 1.1600

"EUR/USD has slipped back below 1.170 in line with our call. The pair continues to be almost entirely driven by USD moves and the unwinding of tariff risk on the back of a framework Greenland deal, which is proving enough to revive some dollar bulls. The USD downside risks haven’t all disappeared, but further abating of geopolitical tariff risk can favour another gentle leg lower in EUR/USD."

"We still see risks extending to 1.1600 in the short term for EUR/USD. Today appears to be a better opportunity for a move lower in the pair than tomorrow, when eurozone PMIs are released and can fit the narrative of an improved eurozone macro outlook."