The European economy needs a "profound overhaul" to withstand the "dawn of a new international order," ECB President Christine Lagarde said on Wednesday.She also noted that she expects only a minor inflationary effect from US tariffs, with the impact on Germany being stronger than on France, but added that European countries would be much more resilient if they abandoned non-tariff trade barriers within the bloc.

The single European currency has strengthened significantly against the US dollar, but, as we suggested earlier, the market has met resistance as it approached the 1.1770-1.1800 area.