With dovish signals from the European Central Bank’s (ECB) major European counterparts (the Bank of England and Swiss National Bank) and investors’ nerves still quite jittery on EU fiscal and political developments, the Euro is understandably under some pressure in the latter half of this week, Francesco Pesole, FX Strategist at ING argues.
EU activity indicators proved favorable for the Euro
“What had come to the help of the common currency in some instances recently was decent activity indicators, and PMIs are released today. It will be interesting to see whether political uncertainty in France has already taken a toll on French business sentiment at all: consensus doesn’t believe so.”
“We’ll hear from two ECB members today – Gediminas Simkus and the hawk Joachim Nagel – who could move the market on comments about the current turmoil in EU bond markets.”
“We still think EUR/USD can trade a bit lower into the US core PCE/French election events in late June. Risks of multiple days of trading below 1.07 are tangible.”