On Friday (Oct 28), / low pushed higher, temporarily traded at 0.9991, up 0.29%.
“Normalization has not yet been completed, and the size of future rate hikes will depend on the data and will be decided on a meeting-by-meeting basis,” European President Christine Lagarde said at a subsequent press conference. “The terminal (peak interest rate) may exceed the neutral rate.”
Ms Lagarde said risks to the eurozone’s economic outlook were “clearly” on the downside.
Economic activity in the euro area is likely to slow significantly in the third quarter of this year and we expect it to weaken further in the rest of this year and early next year.
On the energy aid package, Lagarde said member countries’ energy price subsidies should be temporary and targeted at the most vulnerable to prevent inflation from rising further.
At the same time, Ms Lagarde demanded that member countries reduce their public debt ratios.
Lagarde predicted that inflation is expected to continue to rise and remain above the central bank‘s target for an extended period of time.
The main risk in the short term is a further rise in retail energy prices.
Eur/USD short-term support at 0.9915-0.9920, significant short-term support at 0.9870-0.9875.
