EUR/USD steadily regains ground as Lagarde stresses rate hike outlook, economists at Scotiabank report.

Door is clearly being left purposefully open to the rate cycle extending beyond July

ECB President Lagarde spoke at the central bank’s policy forum earlier and reiterated a hawkish perspective for rates, noting that –  barring any major changes – the bank will tighten rates again in July and that it was unlikely that policymakers would be able ‘to state with full confidence that peak rates have been reached’ anytime soon. The door is clearly being left purposefully open to the rate cycle extending beyond July. 

The ECB’s clearly hawkish policy approach – not pausing or ‘stretching out’ hikes – contrasts with the Fed and should support the EUR in the coming weeks