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6:36 PM · 27 February 2023

ECB's Vujcic remarks put some pressure on EURUSD

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EUR appreciated strongly against USD during the European session, however bullish momentum lost its steam in the evening as markets digested fresh comments from ECB's Vujcic.

  • Markets are right to price in 50 bps for the March meeting.

  • Rates are about to enter restrictive territory.

  • Labor markets are likely to remain strong.

  • We must persevere as long as core inflation remains high.

  • We must consider both headline and core inflation

  • Headline inflation is set to fall.

  • The role of the ECB is not to determine where the terminal rate should be.

The market is pricing in a 44% chance of 75 bps at the ECB March meeting

EURUSD retreated sharply from session high at 1.0620, erasing a large chunk of today's gains. Nevertheless as long as the pair sits above local support at 1.0580 another upward move may be launched. Source: xStation5

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