Euro Faces Limited Downside Against Dollar, Scotiabank Says

Scotiabank analysts have weighed in on the euro's prospects against the US dollar, suggesting that its downside is limited and it will likely trade within a defined range.

The bank cites divergent central bank policies as one of the headwinds facing the euro, but notes that much of this negative news is already priced into the market. As a result, they see little likelihood of a sustained breakdown below current levels.

The EUR/USD pair has been trading in a relatively narrow band around 1.05 to 1.08, and Scotiabank's analysis suggests that this range is likely to hold.