EUR: Quietly bid on the day – ING
It did not take a lot for EUR/USD to push through last week's 1.1720 high, a move we had not been expecting, ING's FX analyst Chris Turner notes.
EUR/USD might grind back to the 1.1680 area today
"If the move had been based on fears of another cliff-edge on tariffs on 1 August and a mini repeat of the 'Liberation Day' sell-off in US assets, then the overnight deal with Japan should calm some nerves. And the cross-asset story yesterday did not support such a narrative."
"Instead, we suspect that EUR/USD demand is related to the ongoing rotation out of assets in the equity, government bond and credit space. Indeed, news from the credit space is that global investors are showing a keener interest in euro-denominated products, and issuers are obliging. This is bound to be a story we'll be tracking closely and one that we flagged in this report on the opportunities for the euro."
"Technicals are supportive for EUR/USD after three weeks of consolidation. But if USD/JPY is not as offered as it has been so far this week and if the US housing data does pick up, EUR/USD might grind back to the 1.1680 area today. From the eurozone side, look out for some modest improvement in July consumer confidence."
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