EUR/USD and a Return to $1.0450 in the Hands of ECB President Lagarde

It is a quiet start to the week for the EUR/USD on the economic calendar. There are no economic indicators from the Eurozone for investors to consider.

Following last week’s reaction to the private sector PMIs and business and consumer sentiment numbers, monetary policy will remain a focal point today.

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Last Thursday, the ECB monetary policy meeting minutes highlighted that “households were increasingly postponing major purchases and reducing their savings in order to maintain their consumption of basic necessities.”

Despite this, the ECB noted that there was still excess savings from the COVID-19 pandemic and, coupled with fiscal support and labor market conditions, should drive consumption.

Following the latest sentiment numbers, the markets will look for any shift in sentiment toward the economic outlook and monetary policy.

ECB President Christine Lagarde will speak today. While ECB member commentary has delivered uncertainty toward the December policy move, Lagarde has maintained the need for further rate hikes to tackle high inflation. Clues on the likely size of the next move would influence the EUR/USD.

EUR/USD Price Action

At the time of writing, the EUR was down 0.03% to $1.03819. A mixed start to the day saw the EUR/USD fall to an early low of $1.03655 before finding support.

EUR/USD holds steady.
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