Europen Central Bank governor, Christine Lagarde has said that even though most measures of longer-term inflation expectations currently stand at around 2%, these measures warrant continued monitoring.
She says price pressures remain strong and underlying inflation is still high. She intends to lift rates by 50 basis points at the March meeting.
Lagarde says while confidence is rising and energy prices have fallen, we expect activity to remain weak in the near term.
Lagarde’s comments are supporting EUR/USd at the time of writing. The Euro meanwhile, fell against the US Dollar on Wednesday after hotter-than-expected US Retail Sales data last month, coming a day after a report showing stubbornly high US consumer prices. EUR/USD is currently trading down some 0.6% after falling from a high of 1.0744 to a low of 1.0661 in the day’s range so far.