ING: The EUR - FJElite

Friday's further drop in short-dated US rates is helping EUR/USD reconnect with the short-term fair value. It is currently pressing intraday resistance at 1.1585, above which 1.1650 is the outside possibility in quiet trading conditions. Even though the euro is far from a high-yielder, it seems international investors like the eurozone as a diversification play against the US Al boom. We will be interested to see whether the eurozone June current account data (released Wednesday) continues to show very strong demand for eurozone debt and equity markets. This flow is currently running around €ltr on a rolling 12-month basis.

On the eurozone calendar this week are European Central Bank speakers and Friday's release of the flash PMIs. These are probably euro-supportive.