EUR consolidates rally from February lows – Scotiabank
|The Euro (EUR) is softer, down 0.2% against the US Dollar (USD) and underperforming most of the G10 currencies along with Swiss Franc (CHF) and Australian Dollar (AUD), Scotiabank's Chief FX Strategist Shaun Osborne notes.
ECB sees US tariffs as disinflationary
"The EUR’s modest weakness is likely just a pause following its impressive rally from recent lows just above parity. The market tone is mixed and muted overall, offering no clear thematic drivers."
"Preliminary PMI’s are scheduled for release on Wednesday and are expected to show a continued contraction in manufacturing alongside a softening in services growth. Comments from ECB Gov. Council member Rehn were dovish, highlighting that US tariffs were a short-term headwind to euro area inflation."
"EUR/USD looks to be settling into a short-lived period of consolidation following its impressive rally from its early February lows. Momentum signals are bullish and overbought, with an RSI around 74. We look to near-term support below 1.14 and anticipate resistance above 1.1550."
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