The Euro (EUR) is up a marginal 0.1% against the US Dollar (USD) and a mid-performer among the G10 currencies, quietly consolidating in the mid/upper-1.16s as market participants focus on political developments in France and the prospect of renewed stability, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

EUR is marginally up

"France/Germany yield spreads are steady, reflecting PM Lecornu’s success in passing the first of two no-confidence votes scheduled for today."

"Sentiment continues to dominate as the EUR remains tightly correlated to risk reversals, which are once again pricing a slight premium for protection against EUR strength. Comments from the ECB continue to reinforce the central bank’s neutral stance on rates, confirming the market’s pricing of a policy hold through the end of the year."

"The RSI has recovered back to neutral levels around 50 and the EUR is attempting a break of the descending trend line drawn from the July lows. We remain neutral absent a break of the 50 day MA at 1.1691, and we see limited resistance ahead of 1.1750. We look to a near-term range bound between 1.1600 and 1.1700."