Lagarde speech: Rates will be kept sufficiently restrictive for as long as necessary

Eren Sengezer FXStreet

While testifying before the European Parliament's Committee on Economic and Monetary Affairs on Monday, European Central Bank (ECB) President Christine Lagarde said that they expect the economic recovery in the Eurozone to strengthen over time.

Key takeaways

"Looking ahead, the suppressed level of some survey indicators suggests that the recovery is facing headwinds."

"The labour market remains resilient."

"Employment growth slowed to just 0.2% in the second quarter, and recent indicators point to a further deceleration in the coming quarters."

"Looking ahead, inflation might temporarily increase in the fourth quarter."

"The latest developments strengthen our confidence that inflation will return to target in a timely manner."

"We will take that into account in our next monetary policy meeting in October."

"Policy rates will be kept sufficiently restrictive for as long as necessary to achieve our aim."

"The new data available at the time of the September Governing Council meeting reinforced our confidence in the timely return of inflation to our 2% target."

Market reaction

EUR/USD came under modest bearish pressure with the immediate reaction to these comments and was last seen trading near 1.1170, where it was virtually unchanged on the day.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.