EUR Falters Following ECB Guidance

• EUR/USD initially rose on the ECB rate decision, with the currency gaining on the ECB pre-commitment to a March hike. This price action then faltered, with the statement clarifying that after a 50bps rate rise in March, the ECB "will then evaluate the subsequent path of its monetary policy" - suggesting a pause for rate hikes could be a consideration.
• EUR/USD's initial pop to 1.1004 has been swiftly reversed, putting the pair at session lows of 1.0964 before stabilising.

ECB press statement link here.

Highlights:

• Governing Council will stay the course in raising interest rates significantly at a steady pace and in keeping them at levels that are sufficiently restrictive
• Council intends to raise interest rates by another 50 basis points at its next monetary policy meeting in March and it will then evaluate the subsequent path of its monetary policy
• Rate decisions will continue to be data-dependent and follow a meeting-by-meeting approach
• the APP portfolio will decline by €15 billion per month on average from the beginning of March until the end of June 2023