ECB’s Panetta: Inflation will remain subdued for a protracted period

Dhwani Mehta FXStreet

The Euro area price pressures will remain subdued for a prolonged period, the European Central Bank (ECB) Executive Board Member Fabio Panetta said Monday.

Key quotes

We can guarantee our commitment to support the recovery.

For monetary policy, this means providing certainty about financing conditions well into the future.

The PEPP envelope can be further expanded and extended, if warranted.

We stand ready to adjust all our instruments if downside risks to the outlook materialise, including those stemming from exchange rate dynamics.

An appreciation of the euro could significantly affect euro area inflation.

There should be no doubt here: the ECB will not accept inflation settling at levels that are inconsistent with its aim.

Financing conditions will need to remain very supportive even as growth accelerates from next year onwards.

EUR/USD challenges daily highs

EUR/USD extends its advance above 1.2150, mainly driven by the risk-mood-led US dollar weakness.

The spot trades at 1.2160, up 0.38% on the day.

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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