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Euro Weakness: Lagarde’s Test
Last month the European Central Bank (ECB) confirmed its intentions to raise rates by 25bp at the next monetary policy meeting, scheduled for July 21st. Going forward, even though gradual increments are expected, inflation in Europe has already climbed above 8% and the question remains as to whether small rate hikes will be able to address the matter. And while the ECB hasn’t started raising rates yet, many other economies have, which has left the Euro behind and the currency has fallen dramatically of late as rates markets adjust to these new higher rate regimes elsewhere. On the inflation front, Europe is in a ... (full story)