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Analysts at Scotiabank explained that  ECB rate tightening is not expected until Q3 2019.

Key Quotes:

“Germany reported as expected Jul PPI (+0.2% M/M, +3.0% Y/ Y) while Eurozone construction output rose 2.6% in the Jun year. Bloomberg’s survey of forecasts reflected a slight deceleration in growth expectations (2.1% this year, down from 2.2% in the previous survey) while an ECB rate tightening is not expected until Q3 2019. Eurozone-US rate spreads have flattened out over the past couple of months around -325bps but the yield gap remains a significant hurdle for the EUR absent a more obvious (USD-negative) reasons USD long positions to bail out.”

“The market really needs to get back to the 1.15 area to steady and push on through the upper 1.15s/low 1.16s (40-day MA at 1.1610) to strengthen. Support is 1.1375/00.”