EUR appreciated strongly against USD during the European session, however bullish momentum lost its steam in the evening as markets digested fresh comments from ECB's Vujcic.
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Markets are right to price in 50 bps for the March meeting.
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Rates are about to enter restrictive territory.
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Labor markets are likely to remain strong.
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We must persevere as long as core inflation remains high.
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We must consider both headline and core inflation
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Headline inflation is set to fall.
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The role of the ECB is not to determine where the terminal rate should be.
The market is pricing in a 44% chance of 75 bps at the ECB March meeting
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EURUSD retreated sharply from session high at 1.0620, erasing a large chunk of today's gains. Nevertheless as long as the pair sits above local support at 1.0580 another upward move may be launched. Source: xStation5
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