The euro moved in lockstep with sterling against the US dollar yesterday, gaining over 1% as Christine Lagarde made it clear that the ECB did not see the battle against inflation as won.
“Should we lower our guard?” she said. “We asked ourselves that. No. We should absolutely not lower our guard. We did not discuss rate cuts at all. No discussion, no debate.”
She was supported in this by Spanish inflation data yesterday that was upwardly revised to 3.3% in the year to November.
This afternoon there will be a reading for French inflation (currently 4% but expected to fall to 3.4%) and also a flash reading for the Purchasing Managers Index (PMI) across the eurozone as a whole, but also in key markets. Watch out especially for German manufacturing PMI, which could well move the dials if wildly different than the 43.2 expected.
Next week starts with the Ifo Business Climate report for Germany and on Tuesday eurozone inflation.
EUR/USD past year
