EUR/USD: EUR capped again at 1.12 – Scotiabank
|Eurozone Manufacturing PMI was revised up in September to 45.0 (from 44.8) after Spain reported a solid gain and German and French data were nudged up marginally from preliminary reports, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
Soft EZ inflation bolster October ECB cut bets
“Eurozone Manufacturing PMI was revised up in September to 45.0 (from 44.8). But generally soft activity data and weaker than forecast Eurozone CPI today (-0.1% M/M for September) are bolstering expectations that the ECB will cut rates again this month, with 23bps of easing now priced into swaps.”
“Wider EZ/US spreads (2Y bond spreads have widened 20bps since September 18th) have undercut the EUR and reinforced the ceiling on the EUR around the 1.12 area for now.”
“Another strong rejection of the 1.12 area this week leaves the EUR looking prone to a little more weakness at least in the short run. A weak close for the EUR yesterday (bearish outside range session) signals a firm top on the EUR on the daily chart. A push back to the lower end of the recent range to 1.10 (and major support) is likely to develop in the short run.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.