EUR: Europe's glass seen half full – ING

European currencies seem to be holding onto recent gains, ING's FX analyst Chris Turner notes.

EUR/USD might stay gently bid in a 1.1650-1.1750 range

"Whatever the news from Washington today, what is welcome is the decline in oil and gas prices. Remember it was the surge in oil and gas prices in the summer of 2022 – and the negative terms of trade shock to the eurozone – which sent EUR/USD below parity. Unless Ukraine-Russia negotiations really fall apart and Trump's 'over-familiarity' with Putin does a U-turn to send oil prices higher, we think benign global conditions can keep EUR/USD gently bid."

"In terms of eurozone inputs this week, the data highlights will be the August flash PMIs on Thursday. We'll also be looking at tomorrow's release of the June Balance of Payments data to monitor whether foreign appetite for eurozone assets remained as strong as it did in May. Wednesday sees European Central Bank President Christine Lagarde speaking in Geneva. Financial markets barely price in one further ECB rate cut over the next 12 months, and we doubt Lagarde will rock the boat with her speech."

"EUR/USD should stay gently bid in a 1.1650-1.1750 range through the early part of the week, but could make a run at the 1.1830 should Powell prove sufficiently dovish on Friday."