ECB’s resolve to hike sets the stage for lots of euro whiplash

This week alone has brought several surprises for euro traders.

ECB President Christine Lagarde says “stay the course” is her new mantra. Photo: AP /Michael Probst.

Volatility in the euro has calmed down after a tumultuous 2022, sliding at the fastest pace ever. That’s leading some currency players to think it’s worth starting to bet on greater swings.

There’s a consensus among global investors that things will quieten down now that inflation is easing and the Federal Reserve is taking its foot off the gas on rate hikes. Yet European policymakers keep pushing back against that market positioning, setting the scene for renewed volatility in the euro.