ECB policymakers signal likely interest rate hikes starting June to combat deteriorating inflation outlook, as energy-driven price pressures risk becoming entrenched beyond temporary shocks, with actual inflation already at three percent versus the two percent target.
ECB policymakers, including Philip Lane and François Villeroy de Galhau, downplayed April rate hike prospects, emphasizing data dependency over timing as markets scaled back hike bets to just twenty percent probability.
ECB policymakers consider a rate hike as inflation may linger, possibly tightening policy as soon as June.
The USD Index fell 0.5% following Iran and the USA's announced peace agreement and the Iranian Foreign Minister's declaration opening the Strait of Hormuz, reducing geopolitical risk and triggering dollar weakness amid collapsing oil prices and equity market gains.