Euro jumps broadly after ECB President Christine Lagarde turns a bit more hawkish in the post meeting press conference. She said that inflation is likely to remain elevated for longer than previously expected. The governing council will remain attentive to the incoming data and carefully assess the implications for the medium-term inflation outlook.
Lagarde also indicated that inflation surprises caused unanimous concerns on not to rush into decisions. When pressed on the question of whether a rate hike remain highly unlikely in 2022, she refused to echo what she said before. But she just said she never make pledges without conditionalities. This is an indication that Lagarde is leaving the door open to a change in forward guidance in March to reflect the chance of a rate hike within this year.
EUR/GBP is staging a u-turn after hitting 0.8282, just ahead of key long term support at 0.8276. The question is whether the rebound is strong enough to push EUR/GBP through 0.8421 resistance to confirm near term bullish reversal.
