EUR/USD soft on Brexit concerns - Scotiabank

Analysts at Scotiabank explained that EUR/USD is trading softly as UK referendum fears weigh on spot directly and cross-related selling (EURJPY, EURCHF safehaven demand) add to downside momentum.

Key Quotes:

"National CPI data for May today showed little or no change from the preliminary data (Spain, Italy) while Eurozone industrial production data for April rose 1.1 in the month, above market consensus calls."

"Data had little or no impact on the EUR, however.

Eurozone-US short-term spreads continue to shrink as investors push US yields lower but we doubt the narrow yield differential will have much impact on spot at the moment. EUR/USD remains overvalued relative to our equilibrium estimate (1.0470) by quite a margin."