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In a blog post published on the European Central Bank’s (ECB) website,  Christine Lagarde, President of the ECB, said that the near-term economic outlook in the euro area is subject to uncertainty amid the dynamic of pandemic and vaccination campaings.

Additional takeaways

“The pledge to use the PEPP to preserve favourable financing conditions relies on its inbuilt flexibility.”

“A joint assessment of the evolution of financing conditions and the inflation outlook, however, concluded that there was a risk that the repricing in long-term bond yields could be inconsistent with offsetting the negative pandemic shock to the projected  inflation path.”

“Uncertainty around the inflation outlook remains considerable.”

“We stand ready to adjust all of our instruments, as appropriate, to ensure that inflation moves towards our aim in a sustained manner, in line with our commitment to symmetry.”

Market reaction

The EUR/USD pair showed no immediate reaction to these comments and was last seen gaining 0.15% on the day at 1.1922.