Comments from a Finnish ECB official – representing Governor Rehn – echoed the line from ECB President Lagarde (rates are at a level which, maintained for long enough, will bear down on inflation) but added that this did not necessarily mean that rates will not rise again. The comments had little impact on the EUR, which struggled to regain the 1.05 handle, however. Markets clearly feel the ECB has peaked.

Trend momentum is bearish and EUR losses through key support (now resistance) in the low 1.06 area leaves the door open for the slide to extend to 1.04 (1.0406 is the 50% retracement of the Sep’22/Jul’23 rally).