Yesterday, Governing Council member Martin Kazaks suggested that the ECB may raise rates as soon as July due to "significant" inflation risks. This hawkish comment has been followed up with another by ECB Vice President Luis De Guindos, who said in a Bloomberg interview that, in his opinion, the ECB's APP "should end in July."
These views are very different from President Lagarde's communication. Last week's ECB statement and press conference inferred that the APP would end in Q3 of this year and that rates will only increase after its conclusion.
The EURUSD has reacted sharply to the comments, as per below's daily chart. The pair moved from its bearish area, between the lower blue and red bands, into the neutral zone, between the blue bands (green rectangle). On a relative basis, this is a bullish development.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.