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ECB signals it is close to the end of their hiking cycle

• ECB delivers a “dovish” hike.
• Updated policy communication signals that today’s hike could be last in cycle although upcoming decisions will be data dependent. Stronger wage growth could still tip balance in favour of one last hike
• Euro and euro-zone yields adjust sharply lower to price in end of hiking cycle. We are still forecasting further modest upside for EUR/USD driven by the weaker US dollar leg through the rest of this year.