Trichet: Downside risks for economy have increased, upside risks still high

Thu, Oct 2 2008, 13:06 GMT
http://www.fxstreet.com

FXstreet.com (Barcelona) - The President of the European Central Bank, Jean Claude Trichet has admitted that economic uncertainty remains extraordinary high after the latest effects of the financial market turmoil, and that downside risks risks to economy have outbalanced inflationary pressures.

Although CPI has moderated somewhat, Trichet advances that prices will remain at a high level in tie forthcoming months to moderate gradually through 2009. nevertheless, according to the ECB President, downside risks to economy have increased considerably on the back of weakening economic activity in the Euro Area.

Trichet has committed again to monitor “very closely” all developments, as the high level of uncertainty complicates the assessment.

Once again Trichet has affirmed the need to monitor wage devts with particular attention, and he adviced to abolish CPI-linked wage schemes.

Trichet’s words have weighed on the Euro and the Euro Dollar has reached a yeat low at 1.38.

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