BOTMUFJ: keep an eye on Germany
The market has forgotten about the ongoing negotiations about the formation of German government. And there’s some progress there: “The CDU’s hints at a willingness to enter a coalition with the Greens may have encouraged a shift from the SPD. Over the weekend, the SPD stated that it would be willing to compromise on its policies of tax rise on the rich as long as the CDU was able to find alternative sources of finance for required investment spending.”
So, if we get positive news from Germany this week, this would “add to the safe-haven appeal of the euro in circumstances of a worsening crisis in the US” supporting EUR/USD.