Lagarde speech: ECB’s mild growth scenario already outdated

Speaking about the European Central Bank’s (ECB) response to the COVID-19 pandemic at the European Youth Dialogue 2020, President Christine Lagarde said that the ECB’s mild growth scenario is already outdated.

Additional quotes

“Economic contraction likely between medium and severe scenarios.”

“It is very hard to forecast how badly the economy has been affected.”

“ECB primary objective is to ensure price stability.”

“ECB had to resort to exceptional measures to make sure there is plenty of liquidity.”

“There will be no new euro debt crisis after the pandemic.”

“Not overly concerned about high debt levels.”

About Lagarde’s speech

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).

Market reaction 

The EUR bulls continue to guard the 1.0950 level following the comments from President Lagarde, as she offers no new surprises in her speech. At the time of writing, EUR/USD drops 0.20% to trade at 1.0960. All eyes on the EU Summit.