Will the ECB slow down rate hikes in March after a 50 basis point hike in February? As reported by Commerzbank economists, the ECB intends to stay the course and the forex market views this as positive.
A credible ECB
“ECB President Christine Lagarde said the ECB was determined to return to the 2% inflation target in good time. As for rate hikes, the ECB would hold its course. At the last ECB meeting in December, Lagarde had signaled a series of rate hikes of 50 basis points for the next meetings.”
Contrary to what happens with the Fed, the market seems to be believing the ECB’s claims, since rate expectations have barely changed in recent days. When it comes to monetary policy, the Euro is likely to be one step ahead. Nevertheless, unless rate expectations are further fueled, it could become increasingly difficult for the EUR to appreciate further against the USD.”
“Sentiment indicators due to be released next week may provide additional momentum. Should sentiment continue to improve, fears of a recession could take a back seat, allowing the Euro to benefit.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
