In his prepared remarks delivered to the Money Market Contact Group, Luis de Guindos, Vice-President of the ECB, noted that long-term inflation expectations were low and argued that the ECB’s monetary policy decisions need to be based on a wide array of economic indicators, not just the unemployment rate and wages.
“There are signs of a tight labour market,” De Guindos added. “The current low unemployment rate and the recent wage increases do not necessarily imply that higher inflation is around the corner.”
The EUR/USD pair seems to be retreating from its session highs on these comments. As of writing, the pair was still up 0.12% on the day at 1.1004.
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