Kit Juckes, Research Analyst at Societe Generale, suggests that the Euro remains very range bound and it still by and large tracks the Bund/Treasury spread, albeit trading a little higher than that spread would imply at the moment. Key Quotes “That raises the question of whether it’s getting support from higher oil prices and indeed, whether further gains ahead of (or after) the Doha producers’ meting could break the current EUR/USD range. There’s a positive correlation, but not one to get too excited about. I can get a small improvement in explaining EUR/USD moves by adding oil to the Bund/Treasury correlation, but I need big oil price shifts to make much difference. Oil finding a base, is not the same as oil embarking on a major rally. When I add oil prices, I still don’t manage to ‘explain’ why EUR/USD is as high as it is. That leaves me reluctant to chase EUR/USD even if oil prices do continue to edge higher. It doesn’t however, change a conclusion that as long as the Fed is super-dovish, and as long as yield spreads are range-bound, there is little chance of EUR/USD falling significantly or, of the dollar generally catching a bid.” For more information, read our latest forex news.