EUR firm on data - Scotiabank

Germany's IFO business sentiment release was in line with expectations on the headline print (86.7 vs. 85.3 prev) and offered upside surprises on both the current assessment and expectations sub-indices, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

ECB hawks suggesting a pause

"The data surprises follow Monday's better than expected PMI's, hinting to a possible improvement in the economic outlook for Germany and Europe more broadly. The improvement in soft data are helpful, as market participants consider a positive shift in the tone of trade-related headlines and specifically the possibility of 'breaks' on US auto tariffs." 

"ECB headlines have also leaned hawkish with comments from ECB Governing Council member Kazimir hinting to a pause in the central bank's easing cycle." 

"EUR is trading flat vs. the USD, consolidating just above support around 1.08. The recent pullback appears to be stabilizing, but we'll need to see a break through the mid-1.08s to consider the possibility of a renewed uptrend."