06:17 AM EDT, 08/06/2024 (MT Newswires) -- EUR/USD briefly printed above 1.10 on Monday on the back of the huge United States Federal Reserve easing repricing, said ING.

The US dollar (USD) may recover a bit more ground on Tuesday and investors could see EUR/USD slip back to the 1.090 mark, wrote the bank in a note.

The two-year EUR:USD swap rate differential is now -100bps after having touched -71bps on Monday, stated ING. This is huge volatility but also follows a tightening trend in the spread that started in April . The bank's short-term models indicate EUR/USD should be trading above 1.10 even if that spread rewidens by another 20bps in favor of the US dollar.

In the rest of Europe, Norway's krone (NOK) should lead the pack in an equity rebound after taking the hit on Monday due to its low liquidity character, pointed out the bank.

ING would expect Sweden's krona (SEK) to lag NOK due to lower beta-to-risk sentiment and speculation on a 50bps cut by the Riksbank on Aug. 20.