ECB's Schnabel: ECB will not adjust policy on this year's inflation spike

Anil Panchal FXStreet

Early Tuesday morning in Asia, Isabel Schnabel, Member of the Executive Board of the European Central Bank (ECB), joined the chorus of global central bankers who defy reflation fears.

The ECB policymaker initially highlights expectations that German inflation could “exceed 3% this year,” before stating, “but the European Central Bank considers this a transient rise and will not adjust policy in response.”

With oil prices rebounding after their collapse a year ago, eurozone inflation is already close to the ECB's nearly 2% target but underlying price growth, a measure closely watched by the policymakers, remains below 1%, said Reuters piece.

FX implications

Following the news, EUR/USD licks its wounds around 1.2130 after dropping the most in a week, not to forget reversing from 10-week’s top. With most of the global central banks trying to ignore inflation pick-up this week’s US Consumer Price Index (CPI) becomes the key to watch.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD extends recovery, trades above 1.3200

GBP/USD holds on to modest gains above 1.3200 on Friday, building on gains seen in the previous day. Still, Cable struggles to build on its recovery as cautious market sentiment keeps investors focused on the US-Iran conflict and ongoing volatility in global technology stocks.

EUR/USD pops to daily highs near 1.1420

EUR/USD extends Thursday's recovery and climbs past the 1.1400 yardstick at the end of the week. The pair’s recovery comes as the US Dollar remains on the back foot, while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold advances to two-day highs, targets $4,100

Gold trades in a tight range above $4,000 per troy ounce on Friday, adding to the recent recovery. The precious metal, however, finds it difficult to attract fresh buyers as expectations for a hawkish Fed continue to strengthen.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.