Vladimir Miklashevsky, senior economist at Danske Bank, points out that the biggest news for EUR/USD yesterday was that EU is rumoured to prepare to launch EDP against Italy in June.

“It took EUR/USD 10 pips lower, which to us suggests that it would take a significant deterioration around Italy’s fiscal situation to really move EUR/USD – EU retaliatory measures are not a market mover. Looking further ahead to the rest of the week and into next week, the big question for the market is whether the current dovish Fed pricing is justified. To answer, the market needs more data and updated signals from Fed following last Thursday’s weak PMIs. Fed’s Clarida might provide more clarity on Thursday.”