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Christine Lagarde, President of the European Central Bank (ECB), told the European Parliament on Monday that inflation in the euro area remains low despite the steep increase in January due to a confluence of factors, as reported by Reuters.

Additional takeaways

“If implemented as planned, next-generation EU could even boost growth as early as this year.”

“A more solid recovery is a precondition for re-anchoring inflation around its pre-pandemic path.”

“Accommodative monetary policy stance remains essential.”

“While we expect headline inflation to increase further over the coming months, underlying price pressures are likely to remain subdued.”

Market reaction

The EUR/USD pair edged lower after these comments and was last seen losing 0.05% on a daily basis at 1.2037.