Christine Lagarde spoke today on monetary policy:
-
We want to keep raising the interest rate in order to lower inflation
-
Further rate hikes will be strong
-
The ECB wants to achieve a neutral interest rate, although it is not known at what level it is exactly
-
If inflation does not slow down, increases may continue above the neutral rate
-
In the future, if inflation falls below the target at neutral rates, the ECB may decide to take additional measures
It can be said that Lagarde wants to contain some of the recent weakening of the euro. On the other hand, it has already been said that the ECB will also reach restrictive levels in the case of interest rates. According to some ECB bankers and economists from other institutions, the neutral rate is in the range of 1-2%. Additionally, we can look at 10-year yields or long-term inflation expectations, although in this case we are also in this range or slightly above. At the moment, however, the market is considering the scenario where interest rates will remain above this level.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
EURUSD is trying to rebound after the morning sell-off partially caused by the collapse of the pound. It is worth paying attention to the RSI, which rebounds from17 pts level. The previous rebound from this level launched an upward move of 180 pips. If history is to repeat itself, the pair could jump to 0.9730 level. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
