Monex Says Euro May Fall Further If Inflation Misses and Lagarde Dials Back Rate-Hike Bets

Monex Europe analysts said the euro faced a risk of further declines if Wednesday’s euro zone inflation data came in below expectations and European Central Bank President Christine Lagarde cooled expectations for additional interest-rate increases. According to Jin10, the analysts said in a report that inflation could undershoot forecasts because recent data released by Germany, France, and Italy were weaker than expected. They added that such an outcome could reinforce the view that the ECB may stop tightening after raising interest rates last month. The analysts said Lagarde could also confirm that view on Wednesday at the ECB forum being held in Portugal.