**BREAKING: Scotiabank Targets Euro Decline to 1.12 Against Dollar on Yield Divergence**
Scotiabank strategists Shaun Osborne and Eric Theoret are projecting further downside for the Euro against the US Dollar, with scope for the pair to reach 1.12. The bearish outlook comes as negative yield spreads between the Eurozone and United States continue widening, creating renewed pressure on EUR/USD.
The divergence stems from markets repricing Federal Reserve expectations in a more hawkish direction while European Central Bank policy outlook remains unchanged. This yield differential is drawing capital flows toward dollar-denominated assets, undermining Euro support at current levels.
The call affects currency traders, corporate treasurers managing Euro exposure, and international payment flows. Any sustained move toward 1.12 would mark a significant depreciation from recent levels, impacting cross-border transactions and hedging strategies for firms operating between Europe and the United States.
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FXnCO Insight
** Traders should monitor US Treasury yields and upcoming Fed commentary closely, as further hawkish signals could accelerate Euro weakness and trigger stop-loss orders positioned above the 1.12 level.
Source: FXStreet