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EUR/USD: Euro Declines on Lagarde’s Statement.

London, Tuesday, 8 February 2022

On Tuesday, the euro fell 0.4 percent to $1.14, extending losses from the previous day, after European Central Bank President Christine Lagarde said there are no signs that Eurozone inflation will be persistently and significantly above the ECB target over the medium term, and that any policy changes will be gradual.

Last week, the euro rose 2.7 percent to its highest level since early 2020, as investors increased their bets on rate hikes in response to the ECB's recent hawkish stance in response to increasing inflation threats.

Although money markets are still pricing in approximately 50 basis points of rate hikes this year, experts are more cautious, with most forecasting the first move at the end of the year or early in 2023.

(Reporting by: The Decision Maker – Banking & Finance editors)


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