The core of the ECB’s communication did not change. The new round of projections sounded quite encouraging from an easing standpoint: inflation was revised marginally lower and projected at 2.0% in 2025, while the growth forecasts were also revised lower. However, President Christine Lagarde reiterated that the ECB is not confident enough about disinflation and that more information will be received in April and especially in June.

EUR/USD is trading close to the top of the range which is consistent with such a wide short-term rate gap (-125 bps in the two-year swap market). That means that it can be vulnerable to near-term corrections, but also that it is starting from a good level should US rates enter a decisive dive.

Today, US Nonfarm Payrolls will determine the direction for EUR/USD: expect some resistance at the key 1.1000 level should the Dollar decline further today.