Euro: ECB pushback weighs on currency – MUFG
MUFG’s Lee Hardman highlights that European Central Bank (ECB) President Lagarde has pushed back against expectations for another back-to-back ECB rate hike, stressing higher long-term yields and the need for a measured response.
MUFG's Lee Hardman notes that European Central Bank (ECB) President Lagarde has expressed reservations about further back-to-back rate hikes by the ECB. She emphasizes the need for a measured response as higher long-term yields come into play. Earlier this week, Lagarde had previously pushed back against the ECB's plans for another rate hike next month.
The lack of second-round effects has led to a lack of momentum for another hike in the coming month. Inflation in the euro-zone would have to exceed expectations in September to reignite the prospect of a rate hike in October. This cautious tone from the ECB has contributed to the weakening of the euro this week.
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