The Euro (EUR) is tracking slightly lower versus the US Dollar (USD), with losses reflecting the broader inroads made by the USD with the support of firmer US yields, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Risk of more slippage on the charts below 1.1515

"The 2Y EZ/US yield spread narrowed to just under –150bps in September but then flatlined. The spread widened some 9-10 bps last week around the FOMC, accounting for the drift in the EUR. Broader support should emerge on EUR dips to the low/mid-1.14s."

"ECB policy hawks are making a strong case for holding policy for the foreseeable future while lower Fed rates remain very likely at some point in the next couple of months."

"EUR losses are stretching to test the base of the rising channel in place since mid-year at 1.1515. A consistent push below here may see EUR losses extend to the 1.14 area (August low at 1.1392). Resistance is 1.1550."