- Christine Lagarde will participate in the World Economic Forum, in Davos.
- ECB President’s speech will be scrutinized for fresh insights on the economy and policy.
- European Central Bank held rates for the second straight meeting in December.
European Central Bank (ECB) President Christine Lagarde speaks in her first of three stage appearances at the annual World Economic Forum (WEF) hosted in Davos, Switzerland on Wednesday at 15:15 GMT. ECB President Lagarde is taking part in a series of town hall-style meetings, with Wednesday’s discussion titled “How to Trust Economics”.
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About Christine Lagarde
Christine Lagarde was born in 1956 in Paris, France. Graduated from Paris West University Nanterre La Défense and became President of the European Central Bank on November 1st 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007–2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005–2007).
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the US Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.74% | 0.63% | 0.86% | 2.12% | 1.78% | 1.88% | 1.12% | |
| EUR | -0.74% | -0.11% | 0.10% | 1.39% | 1.02% | 1.14% | 0.39% | |
| GBP | -0.64% | 0.10% | 0.24% | 1.50% | 1.13% | 1.24% | 0.50% | |
| CAD | -0.86% | -0.10% | -0.20% | 1.29% | 0.92% | 1.03% | 0.30% | |
| AUD | -2.18% | -1.41% | -1.52% | -1.29% | -0.36% | -0.25% | -1.04% | |
| JPY | -1.79% | -1.03% | -1.27% | -0.91% | 0.37% | 0.10% | -0.63% | |
| NZD | -1.89% | -1.15% | -1.26% | -1.02% | 0.26% | -0.12% | -0.75% | |
| CHF | -1.17% | -0.39% | -0.50% | -0.30% | 1.01% | 0.63% | 0.74% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Inflation FAQs
Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it.
Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
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- Source: https://www.fxstreet.com/news/ecb-likely-to-cut-rates-in-summer-lagarde-says-in-davos-202401171200
