EUR/USD: Lagarde's willingness to act may avoid a rout to 1.10 – Scotiabank
|The EUR is leading the major currencies against the dollar with a minor 0.1% gain that has pushed EUR/USD back above 1.13. European Central Bank (ECB) President Christine Lagarde said earlir on Friday "when conditions of the forward guidance are satisfied, we will not hesitate to act." This stance may avoid a EUR/USD drop to 1.10, in the opinion of economists at Scotiabank.
Lagarde affirmed that the PEPP will end in March 2022
“Lagarde said that the ECB ‘will not hesitate to act’ if the conditions of its forward guidance (sustained expectations of inflation over 2%) are met, but she also noted that they still expect inflation to ease from current elevated levels over 2022 – which makes a hike next year very unlikely. She also affirmed that the PEPP will end in March 2022. Her comments signal a higher willingness to act from the ECB that may give the EUR a hand to prevent a marked drop under 1.10.”
“The intraday low of 1.1282 will act as support ahead of the mid figure zone and then the low 1.12s.”
“Resistance is ~1.1315 followed by firmer at ~1.1350.”
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