ECB’s Knot: Euro strength would take prominence if it threatens inflation outlook

ECB’s Knot: Euro strength would take prominence if it threatens inflation outlook

Christine Lagarde2 Large

Commenting on the euro exchange rate, the European Central Bank (ECB) Governing Council member and the head of the Dutch central bank Klass Knot said the euro strength would take prominence for the central bank if it threatens its inflation outlook.

Additional quotes

“The ECB will act if finance conditions were to worsening due to market stress.”

“We have the tools to act on euro strength.”

“Economic outlook depends on vaccine rollout.”

“Economic impact of the second wave of lockdowns seems less severe than first.”

“Side effects of monetary policy are worrying, but in crisis there is no trade off.”

EUR/USD heads towards 1.2200

The US dollar continues to recover ground across its main peers amid broad risk-aversion, driving EUR/USD to fresh daily lows at 1.2120. The above comments exerted additional pressure on the euro.

Markets remain focused on the US durable goods data and Fed outcome.

Credit: FX Street

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