ECB’s Villeroy: No reason that ECB should increase rates between now and end of next year

Dhwani Mehta FXStreet

There is no reason that the European Central Bank (ECB) should increase rates between now and the end of next year, the central bank Governing Council member and Bank of France Head Francois Villeroy de Galhau said on Tuesday.

Further comments

“There is still big difference in terms of rising energy prices and overall total inflation.”

“Total overall inflation should get back to below 2 percent by end of next year.”

“We remain very vigilant on inflation.”

“Following closely what is happening in China, but do not see contagion issues at moment from issues over China slowdown/Evergrande. “

“I think that Evergrande is mainly a Chinese problem. “

“I think that Evergrande’s problems would have broader economic consequences rather than systemic financial problems.”

Market reaction

The above comments are weighing slightly on the euro, as EUR/USD eases back below 1.1650.

At the time of writing, EUR/USD is trading at 1.1645, now gaining 0.34% 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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