Hopes that a Treasury Secretary Bessent could curb a more aggressive approach to trade policies in the Trump administration has allowed the Euro (EUR) to outperform on the session so far, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

EUR slightly positive on minor relief rally on Bessent news

“EUR gains tested the 1.05 area despite Germany’s Ifo survey weakening more than expected in November (85.7), reflecting subdued growth prospects amid heightened uncertainties abroad as well as at home following the recent collapse of the German government. New elections are set for February.”

“Spot has recovered from Friday’s drop to the low 1.03s quite well - just not well enough at this point to suggest that the rebound will extend. It’s a close call though. I think further EUR gains through 1.0500/10 today could prompt a deeper, short-term correction in spot to the 1.0600/50 zone. Support is 1.0450 intraday.”