The euro rebounded towards $1.09, hovering near its highest level since early November (1.0950), as investors welcomed Germany's announcement of an agreement to restructure its debt and significantly increase public spending.

Future Chancellor Friedrich Merz reached an agreement with the Greens and Social Democrats on Friday, ahead of a parliamentary vote next week on reforming borrowing rules.

At the same time, investors are also awaiting Fitch's decision on France's credit rating, due to be published after the close of trading on Friday.

Meanwhile, escalating trade tensions continued to weigh on markets after President Trump threatened to impose 200% tariffs on all wines, champagnes and other alcoholic beverages from the EU in response to the EU's retaliatory tax on American whisky.

Finally, on the war front in Ukraine, Trump announced that he had had a "very fruitful" telephone conversation with Russian President Vladimir Putin, saying that there was a "very good chance" that the war would finally come to an end.

We'll be watching the EURUSD this week to see whether it can climb above 1.0950 or consolidate below 1.0800.