Euro rebound towards 1.1275 against US Dollar draws focus - Scotiabank

Support near 1.11 has helped EUR/USD rebound, with Scotiabank expecting the pair to move towards the range ceiling at 1.1275 over the coming week. The bank’s FX team notes that the Euro is trading slightly lower against the Dollar while ECB officials maintain a hawkish position and markets continue to price in December tightening. Lower Oil prices have not dispelled concerns over European energy.

EUR/USD rebounds as support near 1.11 holds

"The EUR is modestly lower on the session in quiet trade. ECB GC member Radev commented that the October rate pause does not mean that tightening is over, keeping the door open for a December hike. Dec OIS are pricing in 22bps of tightening risk."

"Despite the drop in crude oil prices this week, the European energy focus remains on natgas/power where prices have eased but remain significantly above even the most pessimistic ECB forecasts. "

"Meanwhile, France reported its September YTD budget balance of EUR159.2bn, in line with expectations."

"Neutral – Resilient EUR support in the low 1.11 zone in recent weeks provided the springboard for a solid, short-term EUR rebound. With the range base holding, we still think that spot could/should gravitate back towards the range ceiling around 1.1275 in the next week or so."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Find out more.)