Despite the ECB blackout, the Euro saw some minor gains. The final trading day saw a recovery in market sentiment as most markets were concentrating on news from the World Economic Forum in Davos.
ECB President Christine Lagarde has made great efforts to avoid discussing monetary policy during her scheduled appearances at the WEF. ECB policymakers have been running a media circuit to talk down market expectations of rate reduction from the ECB.
The fight against inflation will be hampered by too optimistic markets, according to ECB officials, who also threatened to cut by the summer if fresh inflationary pressures did not materialize. This week’s dearth of Eurozone’s economic data offered a relief from shocking headlines.
In advance of its policy meeting and rate call on Thursday of next week, the ECB has gone into “blackout” mode. The HCOB Composite PMI was expected by markets to slightly increase in January, from 47.6 to 48.1.
Although the Euro is technically strengthening on Friday, it is not gaining much ground against the US dollar. The Euro is up roughly 0.3 percent compared to the Australian dollar and Pound Sterling, and it is up roughly 0.5 percent compared to the Swiss Franc.
The EUR/USD pair sees relaxed trading, with intraday action mostly flat as the pair sees a thin rebound from midweek declines into 1.0850.
Tags ECB eur/usd Euro Eurozone HCOB Composite PMI Lagarde rate cut
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