EUR: Finally, some good news – ING

The Euro (EUR) found support yesterday after positive political developments in France, ING's FX analyst Francesco Pesole notes.

EUR/USD might potentially build strong support around 1.160

"PM Sébastien Lecornu pledged to delay the pension reform, a key demand from the Socialist Party, which in turn said it won’t back tomorrow’s no-confidence vote. With Socialist support, the chances of passing a budget have meaningfully improved, even if parliamentary numbers remain tight."

"The draft budget targets a deficit reduction from 5.4% to 4.7% this year, though the pension freeze may dent market confidence in long-term fiscal consolidation."

"Still, with the 10-year OAT-Bund spread back below 80bp – its tightest in a month – the euro looks less fragile. If Lecornu survives the no-confidence vote, EUR/USD could edge higher and potentially build strong support around 1.160."