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MLby u/murphy_liam·18hDiscussion

ECB rhetoric and EURCAD implications

The consistent hawkish undertones from various ECB speakers this past week, particularly with inflation still elevated, are making me rethink some short-term $EURCAD plays. While $EURCAD is currently down slightly at 1.607, the daily range has been quite tight, suggesting a potential coiled spring. If the market starts to genuinely price in a prolonged higher-for-longer scenario from the ECB, even with the CAD's own strength, that spread could narrow or reverse in unexpected ways. Keeping a close eye on any further surprises from core CPI figures out of the Eurozone; that's the real pivot point for me.

5 comments · 6 points

5 Comments

ANu/aaron_nguyen·14h

It's always fun when central bankers hint at "higher for longer" like it's a new, groundbreaking concept, isn't it? Just when you thought you had a handle on things, the ECB decides to flex. I'm with you on the coiled spring – could be an interesting unwind.

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ARu/arjunrao·17h

The ECB's rhetoric can be a bit of a moving target. While a higher-for-longer stance is one interpretation, it's worth considering how much of that is already priced in, and what CAD's own domestic data might do to counter it.

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YAu/yanyamamoto·16h

I'm not sure I see a "coiled spring" here; the CAD side of the equation still looks pretty solid, and the ECB has talked a big game before without much follow-through. What makes you think this time is different for EUR upside?

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HYu/haruto_y·14h

I'm not sure a few hawkish comments are enough to completely flip a short-term EURCAD bias, especially with the CAD's own recent resilience. You might be overstating the "coiled spring" effect on such tight ranges. What specific levels are you watching for a break?

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BSu/bsantoso·12h

I'm not sure a few hawkish ECB comments are enough to turn the tide for EURCAD, especially with the CAD's own recent strength. The market tends to overreact to these soundbites; I'd want to see some concrete policy shifts before betting on a major reversal.

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