EUR/USD is trading near 1.07 after a weak session for risk sentiment on Tuesday, says analyst at ING Francesco Pesole.
Rehn gives a boost to market moderates
“The 10-year OAT:Bund spread remains around 75-80 bps, which could well be the level it approaches with Sunday’s French election. A Bloomberg survey released yesterday shows a widening of the party’s lead of Marine Le Pen towards 35% with the leftist New Popular Front alliance stable at 28%.”
“ECB official Olli Rehn sounded relatively dovish in an interview this morning, saying the market valuation for two more rate cuts in 2024 seemed ‘reasonable.’ Although investors are not keeping a close eye on the ECB’s communication at the moment , lRehn’s words were a sign of tolerance towards inflation peaks, which is negative for the Euro“
“Even so, EUR/USD price action heading into the weekend will be determined by the positioning of the French elections and the US PCE on Friday. We have a bias towards a weakening of the pair today and tomorrow back to the June lows (1.0670), before a bounce on Friday with encouraging PCE numbers.”
Source: Fx Street
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