The Euro (EUR) is showing a marginal loss on the day on the screens but EUR/USD has essentially moved sideways in a narrow range overnight as the market consolidates around the EUR’s highest point since the start of the year, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

A correction or consolidation in the bull run

“While much attention falls on the Fed policy outlook as a driver of EUR/USD gains, the ECB cannot be overlooked. Markets remain very confident that another 25bps ease is coming on September 12th but there are some clear, potential impediments to a ‘data dependent’ ECB cutting rates again.”

“Policy hawks were concerned about the level of wage gains in Q1. Germany’s Bundesbank reported today that collective earnings agreements rose 4.2% in the spring which, according to the Bundesbank, will keep inflation high. The ECB reports Q2 negotiated wage data Thursday and another strong gain in wages could check ECB easing bets.”