ECB’s Lagarde: Low interest rate and low inflation has significantly reduced the scope to ease policy

The European Central Bank (ECB) President Lagarde is on the wires now, via Reuters, testifying about the economy and monetary policy before the European Parliament Economic and Monetary Affairs Committee, in Brussels.

Key Quotes

Low interest rate and low inflation environment has significantly reduced the scope for the ECB and other central banks worldwide to ease monetary policy.

Broadly in line with our expectations, the euro area economy continues to grow, though still with modest momentum.

The domestic economy remains relatively resilient.

Global factors weigh on euro area growth.

There are tentative signs of stabilization.

Moderate growth performance is delaying the pass-through from wage increases to prices and inflation developments remain subdued.

The euro area economy therefore continues to require support from our monetary policy.

We continue to closely monitor the potential side effects of our measures.

About ECB President Lagarde

The European Central Bank's President Christine Lagarde, born in 1956 in France, has formerly served as Managing Director of the International Monetary Fund, and minister of finance in France. She began her eight-year term at the helm of the ECB in November 2019. As part of her job in the Governing Council, Lagarde holds press conferences in detailing how the ECB observes the current and future state of the European economy. Her comments may positively or negatively the euro's trend in the short-term. Usually, a hawkish outlook is boosts the euro (bullish), while a dovish one weighs on the common currency(bearish).

EUR/USD: Recovery mode intact

The recovery momentum in the EUR/USD pair seems to have gathered pace over the last minutes, as the shared currency ticked a few pips higher on ECB President Lagarde’s comments.

At the press time, EUR/USD trades 0.09% higher at 1.1007, having spiked to a daily high of 1.1014.