ING: Fed rate hike bets may be overdone, euro could rise against dollar

The market expects the Federal Reserve to raise interest rates before October, while ING Group does not anticipate tightening policy, so the US dollar is expected to weaken in the third and fourth quarters. Although oil prices have retreated due to a temporary peace agreement between the US and Iran, the euro has still declined against the US dollar recently. "We are in an environment where correlations are rapidly shifting and, as oil prices have become almost irrelevant as a driving factor, Federal Reserve rate expectations are taking over strongly," Pesole said. According to London Stock Exchange Group data, the euro earlier hit a three-month low of $1.1416, and was last quoted at $1.1461. ING Group expects the euro to reach $1.18 by the end of the year.