ING: The EUR - FJElite

EUR/USD continues to trade in a lacklustre fashion. Better hard activity data and eurozone economic numbers generally surprising on the upside have failed to provide the euro with much of a lift. That may be owed to unresolved tension in the Gulf, which is keeping European natural gas prices above €60/MWh. In terms of geopolitics, there is very little clarity here, although the latest reports suggest Pakistan and Oman are managing to bring the US and Iran a little closer together.

If the US CPI number does indeed come in on the soft side, EUR/USD should be able to challenge last week's high at 1.1580. That is about the extent of a move priced into one-day straddle options. Much more of a move may be too much to ask in quiet summer markets, given we will also see another round of CPI and jobs data - plus the Jackson Hole Fed symposium - before the Fed decides on policy mid-September.