EUR/USD: bearish due to Central Bank outlooks - Scotiabank

Analysts at Scotiabank explained that the EUR is relinquishing its PMI-driven gains over the course of the European session.

Key Quotes:

"Flash PMI’s were mixed across France, Germany and the euro area with France instilling greater confidence on the back of upside surprises to both the services (52 vs. 50.5 prev. & exp.) and composite (51.6 vs. 50.4 exp. & 50.1 prev.) measures. Germany’s flash PMI’s weakened modestly across manufacturing, services and the composite measure.

EUR remains elevated relative to yield spreads, the 2Y Germany-U.S. spread widening toward levels last seen in late June. We maintain a bearish EUR bias on the basis of relative central bank policy."