The euro recorded another positive day in Monday’s trading as comments from European Central Bank (ECB) president Christine Lagarde lifted the single currency higher.
The euro gained marginally over the pound while EUR/USD advanced by around 0.15%. These are modest numbers, it must be said, but they reflect a far better mood than where the single currency was to begin the year.
President Lagarde gave the euro a leg up with some cautious comments. The euro saw a small bounce as markets took her warning that they should not bet on the ECB cutting rates just yet.
“Our restrictive monetary policy stance, the ensuing strong decline in headline inflation and firmly anchored longer-term inflation expectations act as a safeguard against a sustained wage-price”, she told European Parliament on Monday. Growth may well return later this year, Lagarde continued, and with wage pressures still firm, policy had to stay where it was until they could be confident inflation was heading towards 2%.
It wasn’t just in Europe that a sense of caution prevailed. Global stock markets peeked out from behind the weekend curtain, and finding things much the same this time out, opted to shy away from risk. Most of the world’s flagship indexes were little changed to slightly down as a result, although the S&P 500 is currently riding a streak of weekly gains.
Markets aren’t exactly famed for their restraint, however, and this is especially true in the land of currency. Tuesday sees the Gfk German consumer survey and US durable goods figures — two releases with the heft to move markets in a different direction. Projecting where currencies will move is a mug’s game, to put it bluntly, and any event (be it political, economic, or simply random) could see the cost of your next transaction rise.
In other news, Sweden moved one step closer to joining NATO yesterday after their application was approved by Hungarian parliament. Hungary’s veto had previously been the last major hurdle in the application, which could now be formalised before the week is out.
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