There is still no news about the EU Commercial Proposal to the US, but in our opinion, a commercial agreement between the EU and the US is unlikely to have a significant directional impact on the EUR/USD, which is still mainly linked to the data dynamics of the Fed and the US Draft agreement, says the FX analyst of Ing Francesco Pesole.
EUR/USD can remain anchored around 1,170 for now
“In the front of the European Central Bank, communication has been silent, particularly on the issue of the strength of the euro, despite the fact that it has been an important issue in Sintra’s discussions. Curiously, French prime minister François Bayrou urged the ECB to provide more support through a more lax monetary policy.”
“While this is unlikely to directly influence the Governing Council, it could highlight the growing restlessness among European leaders about the risks of keeping the rates on hold for too long, especially with a strong euro that weighs on exports.”
“The EUR/USD briefly fell to 1,1670 yesterday, and although short -term risks seem more balanced, if slightly biased down, the lack of fresh data suggests that the torque can remain anchored around 1,170 for now.”
Source: Fx Street
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