The EUR\/USD currency pair moved closer to 1.1700 on Monday, following a recent peak near 1.1768. This shift came after ECB President Christine Lagarde spoke on maintaining stable monetary policy amidst US tariff threats.<\/p>\n
Lagarde remarked that the monetary policy settings remain favourable. She also suggested that the short-term impact of new US tariffs would be minimal.<\/p>\n
The European Central Bank has ceased easing, predicting that the EUR\/USD pair will continue to fluctuate between 1.1500 and 1.1800 over the coming months. <\/p>\n
These insights were provided by the FXStreet Insights Team, who compile market observations from various experts.<\/p>\n
We recall seeing this analysis back in 2025 when the euro was holding up against the dollar near 1.1700. The belief was that the European Central Bank was done cutting rates, which would keep the pair trading in a stable 1.1500 to 1.1800 range. That outlook hinged on the ECB maintaining a steady policy.<\/p>\n
As of today, January 21, 2026, that range has clearly broken, with EUR\/USD now trading much lower around 1.0950. The economic divergence we have seen is the primary cause, as Eurozone Q4 2025 GDP growth came in at a sluggish 0.1% while the U.S. posted a more resilient 2.0% expansion. This has reinforced the wide interest rate differential favoring the dollar.<\/p>\n
For derivative traders, the old strategy of selling volatility within that 1.15-1.18 range is no longer valid. Given that Eurozone headline inflation has fallen to 2.1%, just above the ECB’s target, the pressure is on the ECB to consider further easing, not hold steady. This suggests traders should look at buying put options to protect against or profit from a slide towards the 1.0800 level seen in late 2025.<\/p>\n
With the market pricing in a higher probability of an ECB rate cut by mid-year compared to the Federal Reserve, any strength in the euro should be viewed with skepticism. Volatility has been low, with one-month implied volatility sitting near 5.5%, making options relatively cheap. This presents an opportunity to structure bearish positions, such as put spreads, that can benefit from a continued, gradual decline in the currency pair.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/USD nears 1.1700 as ECB maintains steady policy; Lagarde downplays short-term tariff impact.<\/p>\n","protected":false},"author":62,"featured_media":17022,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39761","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39761","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=39761"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/39761\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17022"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=39761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=39761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=39761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}