EUR/USD: Can’t hold gains – Scotiabank

GDP data reports for Q3 from France, Spain and Germany all beat expectations, lifting preliminary Eurozone growth to 0.4% in the quarter, double expectations, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

EUR firms on stronger than expected growth data

“The economy grew 0.9% over the year. Meanwhile, state-level inflation data in Germany was stronger than expected, suggesting the preliminary national data at 9ET risks coming in hotter than the 0.2% forecast. Strong data lifted European yields and prompted a further repricing of ECB easing expectations for December (31-32bps of easing priced in, from 35bps or so yesterday). That still looks too much.”

“Data reports and yields combined to lift the EUR to the mid-1.08s before it eased back. The EUR has shown signs of stabilizing just below 1.08 over the past few trading sessions. Support has been firm on dips to the 1.0760/70 area. This morning’s push higher in spot has not (yet, at least) developed much traction, however.”

“Gains push through 1.0840 which should have been a bull trigger for additional gains but the EUR rally has sputtered and key short-term resistance at 1.0875 remains untested. More range-trading around 1.08 may follow in the next few days.”