In her speech today, Christine Lagarde stressed the need for the ECB to prepare for the coming era of greater inflation volatility. Currently, according to Lagarde, we are operating in an era of magnified risks and uncertainty surrounding the conduct of monetary policy. Hence, despite the increasingly strong conviction among markets that we are exiting the inflationary environment (which is partly reinforced by increasingly bold interest rate cuts by central banks), Lagarde stressed that one of the central banks' goals now should be to keep a close eye on changes in the economy and prepare for potential further challenges to monetary policy.
Lagarde cited changing lifestyles, consumer expectations, technological developments, as well as the global fragmentation of the economy among the factors contributing to the changing economic environment we currently face.
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile appMoreover, the ECB president pointed to a series of supply shocks that have hit the economy over the past few years: a pandemic, the war in Ukraine and the energy crisis. According to the banker, such future supply shocks are now increasingly expected.
For investors, an important piece of news will be the presentation of the results of the ECB's strategy review, which is due to be published in the second half of 2025. While the 2% inflation target remains a non-negotiable factor, the results of the review may still have far-reaching implications for the future of ECB policy. One change may be in the way growth forecasts are carried out and the central bank's way of communication.
In the 1H interval, we do not see clear signals on the EURUSD quotations under the influence of Lagarde's speech. The currency pair is struggling to break through the support set by the local peaks from the previous week in the area of 1.1145. If the pair breaks through the support both the market geometry and the support line from the consolidation from the beginning of the week point to a potential range of declines in the area of 1.11168. Above the support could be a signal to return to today's peaks in the area of the zone 1.1158-1.11678. Source: xStation
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
