EUR/USD has stabilised in the 1.08/1.09 area. Economists at ING expect the pair to break below the 1.08 level although that may not be a story for today.

Coal ban and French elections to keep upside capped

“The EU took the first real measure against Russian energy exports as it banned Russian coal (as well as trucks and ships) starting from August. The notion that EU countries are starting to accept they'll have to pay a price to hit the Russian energy sector – despite oil and gas remaining away from any ban for now – could contribute to keeping the euro on the back foot in the near-term.” 

“We continue to see mostly downside risks for EUR/USD, although a break below 1.08 may not be a story for today.”

“Over the weekend, the first round of the French presidential elections will be a key focus.  A strong performance by Eurosceptic candidate Marine Le Pen might prompt a build-up in political risk on sensitive assets and add pressure on the euro.”