Despite limited euro-zone data and muted European Central Bank (ECB) messaging, EUR/USD could move toward 1.16 and potentially 1.17–1.1750 if concerns over Fed political risk ease, though geopolitical tensions around Greenland continue to cloud the outlook, ING's FX analyst Francesco Pesole notes.

Greenland tensions weigh on European currencies

"The Swiss Franc (CHF) is the best-performing G10 currency this morning, confirming its role as a preferred hedge against Fed independence risk. However, based on 2025 moves, the euro and Swedish krona could also be major beneficiaries. It’s clear markets are in wait-and-see mode, expecting to learn more about the effective implications of these Fed subpoenas."

"On the downside, the US threat of forcefully annexing Greenland remains the big frontier risk for European currencies. While possible FX intervention by the central bank may be having a knock-on effect on liquidity, the latest unusual moves in Danish krone forwards suggest some hedging/speculation may be underway."

"There will instead be little to no domestic data input for the euro this week. And while there are some scheduled European Central Bank speakers, we’ve heard very limited dissent of late, and markets will remain reluctant to change their ECB pricing. We still think EUR/USD can eye 1.1600 in the near term if Fed risk is priced out. But markets may require quite a bit of reassurance first, and we’d rather have a bullish bias to 1.170-1.1750 for today."