EUR/USD slumped right out of the gate in response to renewed tariff risks, leaving spot trading in a tight range in the low 1.04 area through much of Asian and European trade, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR slips back, positioning ahead of ECB

“EUR/USD may remain relatively subdued in the next few days. A 25bps rate cut from the ECB Thursday is fully priced in at this point. Sluggish growth momentum across the major Eurozone economies and the risk of tariffs suggests the ECB will keep the door open to easier policy in the months ahead.”

“Stalled gains yesterday and spot losses so far today combine to tilt the recently more positive technical signals for the EUR back to negative. Loss of support at 1.0455/60 (now resistance) suggests that near-term risks are edging towards a retest of the 1.0380/00 zone.”