EUR/USD is capped at around 1.0050. Analysts at Scotiabank expect the world’s most popular currency pair to retest the 0.9900/10 area on a drop below 0.9985.

Swaps are not yet fully priced for a 75 bps hike

“After another failed test of 1.0050 earlier in the session (minor double top), a sustained push under 0.9985 (neckline trigger) will tilt risks towards a retest of the 0.9900/10 area.”

“Swaps are not yet fully priced for a 75 bps hike, reflecting 67 bps of tightening at the Sep meeting, but the trend is leaning towards the risk of a more aggressive hike which may provide the EUR with some underpinning below 1.00 for now.”