EUR slips back from low 1.05 area – Scotiabank

Germany’s February ZEW Investor Survey reflected a stronger than expected rise in the Expectations index (26, versus 20 expected and 19.3 in January), Scotiabank’s Chief FX Strategist Shaun Osborne notes.

Germany’s ZEW survey jumps

“The improvement likely reflects hopes that the Federal election will produce a pro-growth, market friendly government. Challenges around the outlook remain. A peace deal for Ukraine would be a positive for Europe but the flipside is that more defence spending will surely entail more government borrowing ahead.”

“Minor Euro (EUR) losses vs US Dollar (USD) yesterday and (so far) today suggest recent EUR gains have stalled. The fact that the EUR rebound has (again, so far) failed to retest the late January peak at 1.0533 keeps the broader outlook for the single currency somewhat negative, despite recent gains.”

“Regaining 1.0490/00 in the next day or so is needed to reinvigorate the near-term move higher. Support is 1.0445/50 and 1.0375/80.”