Any developments from Friday’s US-Russia summit will have implications for the euro. However, the considerable uncertainty surrounding the outcome and the reduced G10 FX sensitivity to the Ukraine conflict limit the case for significant adjustments to the Euro (EUR) outlook, ING's FX analyst Francesco Pesole notes.

EUR/USD il likely to break above 1.170 in the near term

"Domestic macroeconomic events in the euro area should offer little near-term support to the euro. The key highlight this week is the ZEW survey. This is widely expected to have deteriorated following the US-EU trade deal, which was poorly received across Europe. This may provide clearer signals on the economic impact of the 15% US tariffs and potentially revive the European Central Bank's dormant dovish faction."

"A September ECB rate cut remains off the table for markets, with only a 20% and 50% chance priced in for October and December, respectively. We continue to view this as overly conservative and expect another cut by year-end. However, given the ECB’s anticipated silence in August and persistently low inflation, it may take time for markets to fully price this in. For now, we regard any potential dovish repricing as a temporary setback within a broader trend of euro strength supported by a structurally weaker dollar."

"A stronger-than-expected US core CPI this week could push EUR/USD below 1.160, but such a move may attract buyers seeking to capitalise on the Fed’s resumption of its easing cycle. We maintain our expectation that EUR/USD will break above 1.170 in the near term."