The EUR is tracking higher on the session, with late week dips to the low 1.08 zone prompting some renewed buying interest from bargain hunters. Short-term EZ/US spreads have nudged a fraction narrower this morning, providing some underpinning for spot, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

EUR jumps on the day

"The EUR remains undervalued relative to my equilibrium estimate (1.0957). Final CPI data for February saw German data unchanged (0.4% m/m, 2.3% y/y). French and Spanish headline data were also unrevised. The EUR advance has accelerated just as we go to print on news that German political parties had reached an agreement on the Chancellor Merz’s spending package."

"Solid gains in the EUR through late morning European trade suggest spot’s recent consolidation from Tuesday’s peak near 1.0950 is breaking down and EUR gains are resuming. Recall that underlying trend momentum is solidly EUR-bullish, with DMI oscillators aligned positively for the EUR across the short-, medium– and long-term studies." 

"This typically means limited counter-trend corrections and an ongoing bid in the market. Resistance is 1.0950/55 but the potential for a retest of the 1.12 September highs is strong."