What the Euro needs, is not a hawkish ECB as much as a better growth outlook, Kit Juckes, Chief Global FX Strategist at Société Générale, says.

It is more about growth than what the ECB says

What matters for the Euro now, are expectations about growth, rather than monetary policy.

The correlation between relative rates and EUR/USD was much stronger in H1 2023 than in H2, but the reverse was true of the correlation between EUR/USD and relative growth expectations, which strengthened in H2 and may remain dominant.

US Q4 GDP data are probably more market-moving than anything that’s happening in Europe. Consensus is at 2%, SG at 1.9%.