The ECB indicated that it will scrutinize all data to be released ahead of the December Governing Council meeting. Following remarks by Governing Council member Lane, the possibility of an additional rate hike before year-end has drawn market attention.
In today's foreign exchange market, buying of the dollar intensified, sending EUR/USD down to the mid-1.11 range. EUR/JPY was trading in the mid-¥176 range, and both pairs had fallen below their 21-day moving averages, making the timing of a recovery harder to gauge.
ECB Governing Council member Lane indicated that all data released by the December Governing Council meeting would be scrutinized, signaling a wait-and-see approach before making further decisions. Although the ECB decided to leave rates unchanged at its October meeting, the remarks signal an additional rate hike in December.
Eurozone inflation in October was more than double the target, while third-quarter GDP grew 0.4%, showing solid performance. Governing Council member Lane said, "We will gather information through December and decide what to do," emphasizing the importance of monetary policy in containing the effects of the energy shock. EUR/USD was reported at 1.1149, EUR/JPY at 176.46 and EUR/GBP at 0.8340.