FX.co ★ Euro Slips Toward $1.18

The euro slipped toward $1.18 as investors reacted to reports that Christine Lagarde may step down early as president of the European Central Bank. According to the Financial Times, Lagarde has not yet decided on the exact timing of her departure, but is reportedly inclined to give Emmanuel Macron—who is barred from seeking a third term in 2027—and Friedrich Merz a central role in choosing her successor. Earlier this month, separate reports indicated that François Villeroy de Galhau, the Bank of France governor and a widely perceived dove, will resign in June, well ahead of his mandate’s scheduled end in October 2027. With inflation in the euro area broadly under control, the ECB is expected to keep interest rates unchanged for the rest of the year. Following the central bank’s February meeting, Lagarde said the bloc’s inflation outlook was in a “good place,” while cautioning against overreacting to short-term or volatile data.