ECB’s Lane: Pandemic shock continues to pose ongoing risks to the projected path of inflation

Dhwani Mehta FXStreet

The coronavirus pandemic shock continues to pose ongoing risks to the projected path of inflation, the European Central Bank (ECB) Chief Economist Phillip Lane said on Thursday.

Additional quotes

The near-term economic situation continues to be dominated by high uncertainty.

Volatility of inflation during 2020-2021 can be largely attributed to the nature of the pandemic shock.

No basis for a sustained shift in inflation dynamics.

GDP likely to have contracted again in the first quarter of this year.

Further extension of lockdown measures will leave an imprint on activity in the second quarter.

US stimulus impact via trade and financial linkages on euro area annual inflation will be about 8 basis points in 2023, although any excessive pressure on long-term nominal yields would diminish.

EUR/USD remains vulnerable

EUR/USD remains pressured towards 1.1700 amid broad US dollar strength and growing covid concerns in the Euro area.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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