EUR: Some renewed attention on Ukraine
One wild card for EUR/USD this year is what happens in Ukraine. Yesterday the FX market took note of the further rise in Ukraine's hard currency bonds, amid optimism that negotiations could bring a potential peace deal closer.
Reports that the US will unveil a peace plan at next week's Munich security conference, in addition to signs that both countries’ leaders are softening their stance towards potential talks, are positive triggers. Last year’s restructured bonds reached their highest price since issue, while the nation’s GDP warrants reached their highest price since January 2022, after steady gains since mid-2024. Developments here will be watched next week and could offer a little support to EUR/USD.
As above with our DXY comments, the question is whether tomorrow's US jobs numbers need to drive the EUR/USD correction briefly back up to the 1.0530/70 area. We cannot rule that out, but doubt that any gains above 1.05 hold for long. We're still happy to look for a move back to 1.02 later this quarter, with 1.00 the likely trajectory in the second quarter when broader US tariffs are brought in.
1.0370-10450 should be the extent of the EUR/USD range today. We doubt eurozone retail sales for December or ECB speakers (Vujic and Nagel) will be a market mover today.
Reports that the US will unveil a peace plan at next week's Munich security conference, in addition to signs that both countries’ leaders are softening their stance towards potential talks, are positive triggers. Last year’s restructured bonds reached their highest price since issue, while the nation’s GDP warrants reached their highest price since January 2022, after steady gains since mid-2024. Developments here will be watched next week and could offer a little support to EUR/USD.
As above with our DXY comments, the question is whether tomorrow's US jobs numbers need to drive the EUR/USD correction briefly back up to the 1.0530/70 area. We cannot rule that out, but doubt that any gains above 1.05 hold for long. We're still happy to look for a move back to 1.02 later this quarter, with 1.00 the likely trajectory in the second quarter when broader US tariffs are brought in.
1.0370-10450 should be the extent of the EUR/USD range today. We doubt eurozone retail sales for December or ECB speakers (Vujic and Nagel) will be a market mover today.
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