EUR/USD Rebounds on Strong Economic Data

The EUR/USD exchange rate is trading in the mid-1.15s with modest gains against the US Dollar, supported by euro area GDP and a return to trade surplus.

Scotiabank strategists Shaun Osborne and Eric Theoret point out that recovering yield spreads are underpinning the Euro, with their narrow fair value estimate at 1.1641, above spot.

The second euro area Q2 GDP release was in line with expectations, printing a 0.4% Q/Q growth rate to deliver a 1.0% Y/Y pace of growth.