We continue to view this inflation upswing as largely temporary, said the ECB President Christine Lagarde at the Hearing of the Committee on Economic and Monetary Affairs of the European Parliament.
- Inflation could prove weaker than foreseen if economic activity were to be affected by a renewed tightening of restrictions.
- Seeing limited signs of this risk of stronger price pressures so far.
- Our baseline scenario continues to foresee inflation remaining below our target over the medium term.
- There are some factors that could lead to stronger price pressures than are currently expected.
- It is evident that the economic recovery in the euro area is increasingly advanced.
- The growth outlook continues to be uncertain and heavily dependent on the evolution of the pandemic.
- We remain entirely committed to preserving these favourable financing conditions.
- This is necessary for a robust recovery that will restore inflation to its pre-pandemic level.
The remarks undermined the already weaker shared currency. The EUR/USD pair was last seen trading just below the 1.1700 mark, well within the striking distance of monthly lows touched last week.