While speaking on the sidelines at the 2024 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) on Wednesday, European Central Bank (ECB) President Christine Lagarde noted that they need to be cautious when asked about market expectations for further rate reductions.

"We need to be cautious because data will come up and will indicate to us what is the state of the economy, what is the state of inflation, of underlying inflation," she said, adding that there will be a judgmental aspect to their decisions and that they will have to be cautious in doing so.

Market reaction

The EUR/USD pair stays on the back foot following these comments and was last seen losing 0.25% on the day at 1.0773.