The pound eased against the dollar on Wednesday, while the greenback held relatively steady after a recent weak stretch, as investors positioned ahead of key central-bank decisions and U.S. inflation data.
GBP/USD slipped 0.05% to 1.3534 as of 06:05 ET, according to market data. EUR/USD was flat at 1.1625, hovering near the midpoint of its range since April around 1.1600.
The dollar index (DXY) faces support in the 98.55-98.65 area, though ING sees little immediate case for a breakdown. A break below that zone could open the door to 98.00, the bank said.
Chris Turner, ING's global head of markets for the UK and CEE, called dollar price action "a little disappointing/confusing" this week. He pointed to higher energy prices stemming from an escalation in the Gulf, which he said would direct more trade flows toward the U.S. at the expense of Europe and Asia.
On the yen, global macro hedge funds are positioning for a downside break below 150 against the dollar over the coming months, Turner said.
For EUR/USD, resistance sits at 1.1640-1.1645; a clear break above could target 1.1675-1.1680. ING's base-case target for the euro-dollar pair is 1.15 by end-September.
Traders are looking ahead to Friday's August U.S. CPI report, described by ING as "the final piece of the puzzle for the Fed's policy decision next week." The bank is forecasting a 25-basis-point rate hike.
On the European side, the ECB is expected to raise rates on Thursday. ING is calling for a "dovish hike — or at least a hike which does not support the additional 50bp of tightening priced in," Turner said.
