Market Analysis

The euro is on track to have its best week in relation to the US dollar following Lagarde’s speech

FOREX

The euro is on track to have its best week in relation to the US dollar since March 2020, with the momentum carrying through early Friday trading. After ECB president Christine Lagarde’s press conference on Thursday the markets reacted by bidding the euro, interpreting her acknowledgment of inflationary risks, and the absence of the usual characterisation of rate hikes in 2022 as very unlikely, as signs of a potential change on forward guidance. With inflation running hot in the euro zone, Lagarde opened the doors for a change in guidance at the March meeting, which may see earlier than expected tightening by the ECB; a prospect that triggered an immediate reaction in the markets, with the single currency having since then gained more than 1% against the US dollar.

Source: ActivTrader

 

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