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With dovish signals coming from its main European counterparts at the European Central Bank (BoE and Swiss National Bank) and investors’ nerves continuing to fray over financial and political developments in the EU, the euro is understandably under some pressure in the latter half of the year. This week, says Francesco Pisole, FX strategist at ING.
Indicators of European Union activity proved favorable for the euro
“What has helped the single currency in some cases recently are good activity indicators, and the PMIs are being released today. It will be interesting to see if the political uncertainty in France has actually affected French business sentiment at all: the consensus does not believe that.
“We will hear from two ECB members today – Gediminas Simkos and hawk Joachim Nagel – who could move the market based on comments about the current turmoil in EU bond markets.”
“We are still thinking EUR/USD The price could fall slightly on key US PCE/French election events in late June. The risks of multi-day trading below 1.07 are appreciable.”
