News
ECB · Euro · Inflation · Interest Rates
ECB officials are reportedly considering an April rate hike if inflation overshoots, leading markets to price in earlier tightening and higher odds of back-to-back moves, which ING analysts believe increases the Euro's upside potential.
ING’s Francesco Pesole highlights that the ECB’s cautious tone masks a hawkish shift. President Christine Lagarde’s press conference conveyed heightened concern for upside risks to inflation.
Bloomberg later reported that ECB officials are already considering a rate hike in April should inflation rise too far above target. Markets now price 15 basis points for an April hike, raising the chances of back-to-back increases.
ING economists are not yet ready to pencil in a rate hike, stating a positive turn in the war and energy prices can still discourage hawks. Further Euro gains depend on no additional major shocks to gas supply.
ING suggests EUR/USD could eye 1.170 soon, backed by a hawkish ECB message, if de-escalation occurs over the weekend.
ECB April Hike Talk Lifts Euro Prospects(current)
Sterling could rise against the euro if Bank of England official Megan Greene supports the case for an interest-rate rise in April, ING said.
The euro fell against the dollar and looked vulnerable as investors seemed more minded to brace for an escalation in the war, rather than a ceasefire, ING said.
