EUR: Welcome news on trade - ING

Dax futures are currently trading up 1.2% as investors welcome some clarity on trade. Whether this remains the final deal remains to be seen, but taken at face value, European corporates can now progress with some planning. This comes at a time when eurozone fundamentals are not that bad - high saving rates, lower inventories and the prospect of some powerful fiscal expansion, ING's FX analyst Chris Turner notes.

EUR/USD to trade at levels close to 1.20 by the end of the year

"The above probably supports EUR/USD at levels close to 1.20 by the end of the year, but our call on the next chapter is a corrective one. Here, we think Fed easing expectations can be scaled back over the coming months, but also that a 25bp rate cut from the European Central Bank in September is underpriced at just a 15% probability."

"Eurozone data this week may support such a view, where second-quarter GDP (Wednesday) is expected to come in flat after a 0.6% reading in the first quarter. And the eurozone July flash inflation print (Friday) is expected to dip under 2.0%."

"With a speculative market already reasonably long euros and a 2% per annum cost of carry against the dollar to deal with, we do not see the case for EUR/USD to immediately push through the highs at 1.1830. Instead, we have a bias for EUR/USD drifting below 1.1700 and perhaps all the way to 1.1600 if the Fed continues to resist pressure to cut rates this Wednesday."