Euro Stabilizes After FOMC Meeting Amid Hawkish ECB Policy

According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Euro (EUR) has stabilized after the recent FOMC meeting. The EUR/USD is currently up by a small margin versus the US Dollar (USD), building on Thursday's modest recovery.

The stabilization in relative policy expectations between the European Central Bank (ECB) and the Fed is seen as a key factor behind this move. ECB policymakers remain hawkish, focusing on energy-linked inflation concerns and growth.

German PPI surprised to the upside, adding to the Euro's momentum. However, the EUR/USD short-term technicals are still bearish but appear to be stabilizing just above oversold levels.

The strategists note that short-term support is at 1.1450 and there is limited resistance ahead of the mid-1.15s.