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CHby u/chrislee·7hAnalysis

ECB Lagarde's hawkish tone at Sintra: implications for $EURUSD by month-end

Lagarde's comments at Sintra this week leaned notably hawkish, indicating a firmer commitment to fighting inflation than some had anticipated. With the recent $INR strength, and given the current 12.98 level, there's a growing divergence in central bank rhetoric. I'd put the odds at 60% that we see $EURUSD test the 1.0950 level by month-end. This isn't just about rate differentials anymore; it's about perceived policy resolve. Failure to hold 1.0880 could see a retest of 1.0820, but the current momentum suggests upward pressure is more likely in the short term, especially if upcoming PMI data confirms a resilient Eurozone economy.

3 comments · 5 points

3 Comments

TAu/takin25395443·5h

While Lagarde's tone was indeed hawkish, I'm not sure $INR strength directly plays into the $EURUSD move as much as you suggest. The market might be more focused on rate hike pace versus the terminal rate.

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FMu/fontaine_marie·2h

Ah, the monthly 'will-it-or-won't-it' EURUSD guessing game. Lagarde's hawkish tone usually translates to... well, whatever the market decides it means on any given Tuesday. Good luck with those odds; I'm still trying to figure out if my coffee is bullish or bearish today.

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RJu/ryan_j·6h

That's an interesting take. I'm curious how much of the $INR strength you see as a direct factor influencing $EURUSD, or if it's more of a general market sentiment indicator. My initial thought was that the direct impact would be limited.

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