The euro slid to its lowest level since August after weak economic data and
dovish comments from ECB President LAGARDE, prompting traders to pare back
rate‑hike bets. June showed contraction in German private‑sector activity and in
French business activity; the euro hit an intraday low on the prints. Option
markets show the most bearish euro positioning in over three months. LAGARDE
said she did not see a need for a more hawkish ECB response to spillovers from
the Iran war, a stance that contrasts with stronger inflation signals from Fed
chair KEVIN WARSH last week. ING currency strategist Francesco Pesole said
LAGARDE's unusually dovish language is significant because the ECB had spent the
The past three months largely defended market hawkish expectations.
