According to analysts at ING, EUR/USD might find stability around the 1.0850 level after briefly surpassing it on Tuesday before closing the day unchanged. The economists examined the factors influencing the pair’s trajectory.
Despite France announcing a 2023 deficit of 5.5% of GDP, higher than 2022’s 4.8% and the government’s 4.9% target, the Euro remained largely unaffected, with OAT spreads showing minimal movement. Fiscal concerns may resurface ahead of France’s September budget, but with the European Central Bank already deep into its monetary easing measures, the overall environment for eurozone bonds remains favourable.
For the current week, no significant catalysts are expected to drive EUR/USD notably higher or lower unless there are surprises in US core PCE data. The consensus is clustered around a 0.3% month-on-month figure. ING suggests that the currency pair could stabilize around the 1.0850 mark.
