You've landed on our UK website.
Click here to visit our USA website.

If you are having difficulty locating the information you require, we're here to help. Just get in touch and we will do our best to assist you.

Weekly roundup: Euro undermined by ECB comments

currency-newsWeekly roundup: Euro undermined by ECB comments
The euro opened last week on the back foot, with the single currency being forced to relinquish some of the gains made the previous week in the wake of the European Central Bank's (ECB) latest policy meeting.

Surprisingly hawkish comments from ECB President Christine Lagarde had turbocharged EUR exchange rates at the start of February on hopes the bank might hike interest rates by the end of 2022.

This set the euro up for a fall when ECB policymakers sought to temper rate hike expectations, with Lagarde warning of risks to the outlook, in a speech on Monday.

Further moderating rate hikes expectations was governing council member, Francois Villeroy de Galhau, who suggested the market reaction to the ECB’s most recent policy meeting may have been too strong.

The EUR selling bias was reinforced in the latter half of the week after the European Commission slashed its EU growth forecast for 2022, in addition to being pressured by its negative correlation with the US Dollar, which surged following the release of a hotter-than-expected inflation print.

Looking ahead, this week will be kicked off by another speech from Lagarde. Should she attempt to further temper expectations for a 2022 rate hike then the euro is likely to stumble.

Elsewhere the focus at the start of the week will be on the latest German ZEW economic sentiment index, where an improvement in sentiment could help to bolster the euro.

However, any upside in EUR exchange rates could be capped by the prospect of a war breaking out on the EU’s doorstep, amidst growing fears Russia might invade Ukraine.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

Check our exchange rate

Thanks, we'll be in touch.

Check your inbox - one of our currency experts will be in touch to complete your quote.

If you want see our online exchange rates straight away, simply register online & log in.