Inflation in the euro is still uncomfortably below the European Central Bank’s (ECB) aim and the appreciation of the euro is one factor that needs to be watched closely, ECB Executive Board Member Fabio Panetta on Tuesday, as reported by Reuters.
“Faced with such a sizeable downward skew, there is a strong case for our reaction function to be asymmetric.”
“Risks of a policy overreaction are much smaller than the risks of the policy being too slow or too shy to react and the worst-case scenarios materialising.”
“Macroeconomic policies – above all monetary and fiscal policies – must remain complementary.”
“Today, our monetary policy can gradually focus less on preventing financial and productive collapse and more on securing the return of inflation to our aim.”
“Results of the ECB’s stimulus are not satisfactory yet.”
The EUR/USD pair edged lower after these comments and was last seen losing 0.22% on the day at 1.1745.