EUR: French politics sidelined for now – ING

EUR/USD

FXStreetJul 12, 2024 11:19 AM

EUR/USD is now entirely driven by the US Dollar (USD) leg as French political risk has now been sidelined while waiting for news on coalition talks. The Euro (EUR) can still ‘enjoy the silence’. That can probably remain the case for a few more days, ING’s FX analyst Francesco Pesole notes.

EUR/USD is set to test 1.0900 soon

“EUR/USD is driven by the USD leg as French political risk has now been sidelined. EUR can still ‘enjoy the silence’. That can probably remain the case for a few more days.”

“Beyond the very short term, we still believe markets can grow impatient with the French political stalemate and start to price back in a degree of fiscal risk into the euro, effectively putting a lid on EUR/USD. On the domestic macro side, things remain very quiet today before next week’s action, which includes the European Central Bank (ECB) meeting.”

“For now, lingering downside risks for the dollar mean EUR/USD could take another shot at breaking above 1.0900 soon.”

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