EUR recovers to low/mid 1.04s - Scotiabank

The Euro (EUR) has managed a fairly solid-looking short-term rebound from yesterday's low near 1.04 on little news other than the broader mood-shift on the USD, Scotiabank's Chief FX Strategist Shaun Osborne notes.

ECB policymakers continue to debate the outlook for rates

"Spot gains are lagging most of the major currencies, however. ECB policymakers continue to debate the outlook for rates; Governor Schnabel commented yesterday that there should be a debate about a halt to rate cuts amid the uncertain inflation outlook. "

"But the rate doves appear to be in the majority and markets are more or less fully priced for a 25bps cut in early March. Solid, local equity returns vs US markets should provide a moderate backstop for the EUR amid current uncertainties."

"The EUR is trading a little higher after rebounding from the 1.04 area yesterday. The rebound in spot from yesterday's low looks technically positive on the short-term chart but price action looks more like a consolidation than a major reversal at this point. Support is 1.0400 and 1.0375/80. Resistance is 1.0470."