Euro currency-related exchange traded funds climbed on Thursday after European Central Bank president Christine Lagarde refused to rule out tightening monetary policy in response to the ECB’s “unanimous concern” over rising inflationary pressures and soaring prices, adding to investor bets of multiple rate hikes in 2022.

The Invesco CurrencyShares Euro Currency Trust (NYSEArca: FXE), which tracks the euro against the U.S. dollar, gained 1.1% on Thursday while the euro rose 1.2% to $1.1437.

The ECB president warned that inflation risks were “tilted to the upside” as annual consumer prices in the Eurozone jumped by a record 5.1% in January, the Financial Times reports.

Lagarde also said that there was “consensus” among ECB policymakers to keep rates unchanged, but also that it will pursue a “step-by-step” reduction in bond purchases this year. However, a person familiar with the council revealed that “one or two” members called for an immediate tightening of monetary policy.

Konstantin Veit, portfolio manager at Pimco, argued that the ECB’s “hawkish message” signaled “more openness towards an earlier withdrawal of monetary policy support.”

Long-time euro bear George Saravelos, global head of FX research at Deutsche Bank AG, has also changed his tune and told investors to go long on the euro-dollar pair, Bloomberg reports.

Lagarde “clearly signaled a pivot from slow-moving calendar-based guidance to something far more active,” Saravelos said in a note. “The shift has been the signal we have been looking.”

Deutsche Bank had not been anticipating strength in the euro until the second half of 2022, as the focus has been on the U.S. Federal Reserve’s move to raise interest rates, which supported the greenback. However, Saravelos has likened Lagarde’s change in tone to similar moves by the Fed in June and January.

“A shift towards faster tightening by the ECB would provide a more positive backdrop for the EUR, although more explicit guidance might not be forthcoming until the March meeting and forecast round,” Dominic Bunning, head of European FX Research at HSBC Holdings, told Bloomberg.

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