ECB to hold rates and Lagarde will avoid talking down Euro value
|We contest that the move above the 1.20 level in EUR/USD last week was perhaps a little stretched, particularly following Scott Bessent’s remarks that suggested that the White House still favours a stronger dollar policy.
Yet, last week’s upbeat Euro Area GDP figures (+0.3% quarter-on-quarter growth) solidify our view that the common currency is well placed to perform well in 2026, particularly as we are yet to see the full effect from Germany’s stimulus package.
The ECB is universally expected to keep rates unchanged on Thursday, with President Lagarde almost certain to reiterate that policy remains in a “good place”, effectively indicating almost no appetite for further cuts for the foreseeable future.
Her remarks on the recent rally in the euro will be watched closely by market participants, but we do not expect her to make any attempt to talk down the value of the common currency at this stage.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.