EUR/USD: The pair reclaims 1.17-handle – OCBC

Euro (EUR) extended its run higher overnight, OCBC's FX analysts Frances Cheung and Christopher Wong note. Pair was last at 1.1732 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

EUR shifts into 1.15–1.20 range in coming months

"After months of waiting, German government finally signed off the draft budget for 2025, paving the way for a significant increase in spending on defence and infrastructure. Defence spending budget will more than double to EUR152.8bn by 2029."

"Meanwhile, NATO member states agreed to a big increase in military spending (5% of GDP). Taken together, these reinforced our view that fiscal will boost German growth in coming years, and potentially have a positive effect on EUR. In fact, the potential for big defence/infra spending is one of the factors underpinning our more-constructive outlook on EUR. "

"Daily momentum turned mild bullish while RSI rose. Break-out trade likely as EUR shifts into 1.15 – 1.20 range in coming months."