Traders brace for euro's decisive moment at ECB's policy meeting

A decidedly hawkish pivot could help convince bears that policy makers are determined to tighten financial conditions despite the headwinds

Foreign-exchange traders are bracing for one of the most pivotal meetings of the European Central Bank in years, where policy makers are set to pave the way for its first rate increase since 2011.

Options pricing suggests that traders haven’t been this jittery about an ECB rate decision since 2019. While the bank is widely expected to hold rates steady on Thursday, the question is whether ECB President Christine Lagarde will push back on expectations of 50-basis-point hikes in the future, which have been building over the past few weeks as the region’s record pace of inflation continues to accelerate.

The decision