According to Kit Juckes, Macro Strategist at Societe Generale, the euro rallied around 1% after a Reuters headline told us that the ECB will discuss the option of a 50 bps rate hike at their meeting this week.

Key Quotes

“The ECB has twisted itself into knots around its forward guidance. You could make a stronger case for a 50bp hike today (inflation) or for doing nothing (Russian gas) than for hiking by 25bp. Still, the headline has increased the pressure to cut euro shorts, and shorts across the European currency market, where HUF, PLN, SEK and NOK are leading the charge.”