EURUSD falls to 10-day low following Lagarde comments
EURUSD fell to its lowest level in ten days, as the ECB President confirmed the bank’s revised growth forecast.
As a result of this, it is expected that the European Central Bank will increase rates for the first time in ten years in July.
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Speaking in a panel with fellow economists, Lagarde stated that, “We have markedly revised down our forecasts for growth in the next two years. But we are still expecting positive growth rates due to the domestic buffers against the loss of growth momentum”.
In terms of further possible hikes, she said, “If the inflation outlook does not improve, we will have sufficient information to move faster. This commitment is, however, data dependent”.
As of writing, EURUSD is trading at 1.044.
Oil prices slips, as crude inventories fall by over 2.8 million barrels
Oil prices fell during today’s trading session, as markets reacted to the news that inventories had fallen by nearly 3 million barrels in the past few weeks.
Data released today showed that Crude oil inventories declined by 2.8 million barrels for the weeks that ended June 17th and June 24th.
The figures from the Energy Information Administration also showed that gasoline inventories rose by 2.6 million barrels during the same period.
President Biden has recently applied pressure on suppliers to ramp up output, in a bid to flood the market with oil.
WTI fell to a low of $109 per barrel on the news.
U.S. indices lower, despite strong Powell comments
Indices in the United States were trading lower on Wednesday, despite Fed Chair Powell’s strong stance on lowering inflation.
Speaking during a panel which included Christine Lagarde of the ECB, and Andre Bailey of the BoE, Powell stated that the Fed will do what it can to stop inflation from rising in the long-term.
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He stated that, “The risk is that because of the multiplicity of shocks you start to transition to a higher inflation regime. Our job is literally to prevent that from happening, and we will prevent that from happening,” the central bank leader said. “We will not allow a transition from a low-inflation environment into a high-inflation environment”.
This comes as fellow Fed member Loretta Mester, she may advocate for a 75-basis point hike, in July’s meeting.
“Stocks are bought not in fear but in hope. They are typically sold out of fear.”–Justin Mamis