Euro: ECB hawkish path supports pair – BBH
Brown Brothers Harriman’s (BBH) Elias Haddad reports EUR/USD is trading heavy around 1.1600 after a hawkish 25 bps European Central Bank (ECB) hike to 2.50%. President Lagarde called the move a “no brainer” and signaled more hikes as inflation is seen above target for an extended period.
BBH analyst Elias Haddad reports EUR/USD is trading near 1.1600 following the European Central Bank's (ECB) 25 basis points (bps) hike to 2.50%. ECB President Lagarde deemed the decision a "no brainer" and hinted at additional rate hikes. Inflation remains well above the target for an extended period, with the ECB revising its inflation projection higher for 2027 and 2028.
Real GDP growth projections were also raised for 2026 and 2027, while remaining unchanged for 2028. The ECB cautioned that the outlook is highly uncertain, with risks to both inflation and growth. The swaps curve suggests ECB rates could reach 3.50% within the next year. Overall, EU-US rate differentials are seen as supportive for EUR/USD.
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- Euro: Hawkish ECB fails to lift Euro – Commerzbank fxstreet.com
