Kit Juckes, Strategist at Societe Generale, argues that the current Bund-Treasuries spread could be the main driver of the pair.
“Greek debt talks, stalled as the IMF pushes for less reliance on tax increases and a greater focus on pension reform, resume at noon UK time today and markets are in ‘wait and see’ mode”.
“The fall-out of the Greek negotiations is more likely to be felt in CEE currencies than inEUR/USD, which is still doing a good job of watching the Bund-Treasury spread more than the events in Brussels”.
“However, the conclusion is that if some kind of patched-up deal can be agreed, the focus will switch to next week’s raft of key US economic data and EUR/USD’s next move will be a function of ISM and NFP. Back, in fact, to business as usual”.