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The deflationary risks to the Eurozone are balanced but the European Central Bank (ECB) needs to deploy pre-emptive measures to avoid a costly recovery, the Governing Council member Peter Kazimir said on Wednesday.

“Easy monetary policy was likely to stay for an extended period, especially as the coronavirus pandemic has brought about a period of extraordinary volatility,” Kazimir added.

Market reaction

EUR/USD is testing critical support at 1.1700, undermined by comments from President Lagarde and disappointing US Presidential election debate.