EUR strengthens despite increasingly dovish comments from ECB – Scotiabank

Euro (EUR) is up 0.7% against the US Dollar (USD), a mid-performer among the G10 and strengthening within the context of a broadly weaker dollar driven by headlines related to trade, Scotiabank's Chief FX Strategist Shaun Osborne notes.

EUR/USD remains in an uptrend

"The EUR is climbing despite dovish comments from ECB policymakers Rehn (Finland) and Muller (Governing Council), both hinting to easing with Rehn speaking to the possibility of a ‘larger cut’. The headlines follow recent policymakers’ comments on the disinflationary impact of US tariffs and are a more explicit endorsement of further easing."

"The ECB’s next meeting is scheduled for June 5 and will offer fresh forecasts. The most recent (April 17) was too close to the April 2nd tariff announcement and left policymakers unwilling to offer stimulus at that time."

"EUR/USD remains in an uptrend, with a clear sequence of higher lows and higher highs. Recent support has been observed in the 1.1280-1.1300 area and near-term resistance appears limited ahead of 1.15."