• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Investing Should you buy the euro amid ECB’s Schnabel keeping a hawkish rhetoric?
Investing

Should you buy the euro amid ECB’s Schnabel keeping a hawkish rhetoric?

by November 25, 2022
by November 25, 2022 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

The FX market was pretty quiet this week due to the Thanksgiving holiday. Also, many investors have already ended the trading year; if not, they are preparing to do so soon.

Yet, some events ahead of us are guaranteed to end in rising volatility. One such event is the December European Central Bank (ECB) decision.

Therefore, paying attention to what the Governing Council members say is critical for the future direction of the euro. For instance, what tone do they use in their speeches – hawkish or dovish?

Isabel Schnabel leaning against an ECB pivot

Yesterday, in a speech held at the Bank of England Watchers’ Conference, Isabel Schnabel ended up being more hawkish than the market expected. She is a Member of the Executive Board of the ECB, so her words matter.

The big question for financial markets (and euro traders) is what the ECB will do next. Will it raise the interest rates by another 75bp in December? Or will it pivot and slow down the interest rate hikes?

Judging by yesterday’s speech, the ECB is far from a pivot.

Schnabel was crystal clear in saying that the incoming data does not justify the slowing down of the pace of interest rate hikes. Hence, a hawkish narrative should support the euro on any dips.

Eurozone excess liquidity is shrinking fast

Last week, everyone interested in where the euro would go next watched how much European Banks would pay in advance from the TLTROs loans provided during the COVID-19 crisis. Two days ago, Eurozone excess liquidity declined by close to EUR250 billion out of EUR4.4 trillion in the system.

Sure enough, it is a small amount.

But the idea here is that the ECB is draining this excess liquidity. Coupled with the hawkish statement from Schnabel, it means that selling the euro in the period ahead is a risky bet.

Plus, there is the wild card everyone should remember–the Ukraine war. Any positive news from Ukraine would boost the euro even further.

🇪🇺 Eurozone excess liquidity just declined by €248bn as TLTRO repayments settled yesterday. Still a long way to go with €4.4tn left. pic.twitter.com/SQxgcV1Rqs

— Frederik Ducrozet (@fwred) November 24, 2022

Not everyone is bullish on the euro

Buying the euro may make sense according to developments in the monetary policy, but not everyone is bullish on the common currency. German consumer confidence calls for caution.

It is nose-diving, suggesting that a deep eurozone recession is looming. Moreover, it took out the 2020 lows made during the COVID-19 pandemic, and all eyes are now on the retail sales volumes during the upcoming holidays.

All in all, the euro should find buyers on dips. It would not be the first time a currency strengthened on poor economic data. After all, monetary policy should prevail.

The post Should you buy the euro amid ECB’s Schnabel keeping a hawkish rhetoric? appeared first on Invezz.

You Might Also Like
  • Peloton stock price is surging: is this a dead cat bounce?
  • Options trading platform SignalPlus integrates with Deribit
  • Are energy stocks worth owning for 2023?
  • Diversification Dos And Don’ts
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Bank and Crypto Runs: F(ac)TX vs Fiction
next post
Coupa Software extends gains on reports of a potential buyout

You may also like

US home price data continues to ease; Miami sees the...

November 29, 2022

Why would investors buy silver over gold?

January 12, 2023

Mizuho’s Dan Dolev is ‘super excited’ about this fintech stock

December 12, 2022

CBI says the UK is in a “short and shallow”...

December 5, 2022

Long Straddle Options Strategy: The Ultimate Guide

March 27, 2023

UK retail sales slip 0.4% as households feel inflation pinch

December 16, 2022

Starbucks stock lacks a meaningful upside from here: Jefferies

December 21, 2022

Meta Platforms could face a big penalty

December 19, 2022

Options trading platform SignalPlus integrates with Deribit

December 29, 2022

Why Alibaba stock is rising and the next price target

January 9, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025
    • Nvidia results spark global chip rally

      May 30, 2025
    • Boeing to resume airplane deliveries to China next month, ramp up Max production, CEO says

      May 29, 2025
    • Nuclear Power Trio: OKLO, SMR, and CCJ in Focus

      May 29, 2025
    • Analyzing SIL, USO, and NVDA: Could These Bullish Patterns Trigger?

      May 29, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,764 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,470 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,450 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,430 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,307 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,105)
    • Investing (538)
    • Stock (2,578)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’...

      May 30, 2025
    • Nvidia results spark global chip rally

      May 30, 2025
    • Boeing to resume airplane deliveries to China next month, ramp...

      May 29, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,105)
    • Investing (538)
    • Stock (2,578)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Argentina win World Cup but ARG...

    December 19, 2022

    Don’t fight US stocks during the...

    November 25, 2022

    How to play the Meta stock...

    December 23, 2022
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here