ECB Hawkish Tone Fails to Boost Euro as Rate Path Already Priced In
Commerzbank analysts note that while the ECB sounded slightly hawkish, markets have already priced in two more rate hikes, leaving the euro softer after Lagarde's cautious remarks.
Commerzbank's Thu Lan Nguyen commented on the euro's recent weakness, noting that the European Central Bank's tone was slightly hawkish during the latest meeting. However, investors have already factored in two additional rate hikes, diminishing any positive impact on the currency.
President Lagarde avoided giving clear forward guidance, which further pressured the euro. The market's anticipation of future tightening seems to be fully discounted, leaving little room for further upside from hawkish rhetoric alone.
As a result, the euro softened against major peers, reflecting the market's focus on the already priced-in rate path rather than the ECB's stance.
Source: FXStreet Forex News