ECB is two steps behind the Fed, digging a hole under the euro
As expected, euro buyers' optimism faded immediately after the ECB press conference began, returning EURUSD to a repeat of 1.0600.
Shortly after the initial surge in reports of an actual reversal in ECB policy, investors and traders delved into assessments of how slower the policy reversal in Europe was.
The ECB will only stop buying assets on its balance sheet later this month - two steps behind the US, where purchases were curtailed months ago and active sales are already due to begin in June.
The Fed raised its rate by 25 points in March and 50 points at the start of May, promising two more 50-point hikes in June and July. From the ECB, we see a conditional promise to consider a rate hike of more than 25 points in September in case of high inflation forecasts for 2023.
That said, inflation in the eurozone is comparable to the US, and economic growth is just as, if not more, vulnerable to logistical failures and energy prices.
