Dutch central bank chief and the European Central Bank (ECB) policymaker Klaas Knot told Reuters in an interview that the eurozone economy is on course for a robust recovery in the second half of the year. This could allow the ECB to start phasing out its emergency bond purchases in the third quarter and end purchases in March 2022, Knot added further.
- There are clearly upside risks for growth in the second half.
- There is good reason to expect a robust recovery in 2H 2021.
- Outlook beyond the short term hasn't changed, economy showing resilience.
- Comfortable with nominal yield rise if driven by better inflation and growth prospects.
- Can flexibly adjust PEPP volumes even within the quarter, if appropriate.
The comments did little to influence the shared currency or provide any meaningful impetus to the EUR/USD pair, which remains confined in a range below the very important 200-day SMA. Investors now seemed to have moved on the sidelines and await fresh catalyst from Wednesday's release of the latest FOMC meeting minutes.
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