Trichet Says Inflation Risks “Balanced”

The euro declined for the second day following European Central Bank President Jean- Claude Trichet’s assessment that the risk of inflation within the Eurozone is “broadly balanced”. The market interpreted the comment as further evidence that the ECB is not considering a rate hike in the near term.

“The market got a little bit ahead of itself in pricing in an interest-rate hike as soon as this summer,” said Jane Foley, a senior currency strategist at Rabobank in London. “We don’t expect the ECB to be hiking rates until October or November so there’s room for a little bit of disappointment, which could result in a correction in euro-dollar.”

Source: Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.