EUR softening to lower end of recent range - Scotiabank

The Euro (EUR) is soft, down 0.2% vs. the US Dollar (USD) and trading under 1.13 with an extension of Wednesday's Fed-driven decline, Scotiabank's Chief FX Strategist Shaun Osborne notes.

EUR/USD remains range bound

"As with the CAD, the outlook for relative central bank policy is dominating as a driver of near-term price action for EURUSD and 2Y yield spreads have also widened (in a EUR-negative manner) about 20bpts over the past week or so."

"In terms of data, Germany's industrial production figures for March were much stronger than expected while the unexpectedly large trade surplus was flattered by an unexpected contraction in imports--a negative sign of internal domestic demand. In terms of trade, there do not appear to have been any signs of progress toward US/EU negotiations, a clear contrast to the US/UK agreement."

"EUR/USD remains range bound, and its movement since mid-April has been limited between support in the mid-1.12s and resistance above 1.15. A downside break would be expected to find support in the mid1.11s."