Market participants may be wary of ECB President Lagarde's remarks

Market participants may be on guard following President Lagarde’s remarks at the ECB

22.07.2021

Yesterday, the three major U.S. stock indices all extended their gains, offsetting the losses seen at the start of the week. Cyclical stocks, such as cruise line shares, drove the market higher.The Dow Jones Industrial Average closed at $34,798, up 0.83% from the previous day. The Semiconductor Index (SOX) also rose 3.06% to 3,288, while gold prices remained in a tug-of-war around the $1,800 mark.

Ahead of today’s scheduled ECB policy rate announcement and statement, the euro is trading in a narrow range. The EUR/USD pair appears to have paused its decline as of yesterday, and on the 4-hour chart, the 20-day moving average is beginning to act as support. However, depending on the stance President Lagarde takes regarding the inflation target during today’s press conference, prices could see significant volatility, so it would be wise to adjust any open positions.

Today’s schedule includes remarks by Bank of England Deputy Governor Broadbent at 17:30 CET, the ECB’s interest rate decision and policy statement at 20:45 CET, U.S. initial jobless claims and a press conference by ECB President Lagarde at 21:30 ET, the Chicago Fed National Activity Index at 21:30 ET, and at 23:00 ET, theLeading Economic Index and Existing Home Sales, at 23:30: U.S. weekly natural gas inventories, and at 24:00: the U.S. Kansas City Fed Manufacturing Activity Index. We should remain vigilant to see if today’s ECB interest rate announcement triggers any significant movement in European currencies.