EUR/USD: Range trading on Lagarde talk – ING

💡 DMK Insight

Lagarde’s potential exit from the ECB is a game-changer for traders: here’s why. The speculation around Christine Lagarde stepping down before her term ends in 2027 is stirring up volatility in the eurozone markets. With the French elections looming, the political landscape could shift dramatically, impacting monetary policy direction. Traders should keep an eye on the potential successors, Pablo Hernandez de Cos and Joachim Nagel, as their views on interest rates and inflation could lead to significant market movements. If either candidate leans towards a more hawkish stance, we could see the euro strengthen against the dollar, especially if current inflation trends persist. But here’s the flip side: if Lagarde stays longer than expected or if her successor adopts a dovish approach, we might see the euro weaken, particularly against the dollar. Watch for key economic indicators in the coming weeks, such as inflation rates and employment data, which could influence ECB decisions. The immediate focus should be on how the market reacts to any official announcements regarding Lagarde’s future, as this could set the tone for trading strategies in the eurozone for the rest of the year.