Amid dovish signals from the main European counterparts of the European Central Bank (ECB) (the Bank of England and the Swiss National Bank) and investor nerves over fiscal and political developments in the EU, the euro is understandably under some pressure in the second half of the year this week – argues Francesco Pesole, currency strategist at ING.
EU activity indicators proved favorable for the euro
“What has helped the single currency in some cases lately is decent activity rates, and the PMIs are being released today. It will be interesting to see whether the political uncertainty in France has had any impact on French business sentiment at all: the consensus does not believe it.”
“Today we will hear from two ECB members – Gediminas Simkus and hawkish Joachim Nagel – who could move the market with their comments on the current turmoil in EU bond markets.”
“We still believe that the EUR/USD rate may decline slightly in the face of key events related to the PCE/France elections in the US at the end of June. The risk of multi-day quotes below 1.07 is tangible.”
