European Central Bank (ECB) President Christine Lagarde delivers the Introductory speech on Day 2 of the ECB Forum on Central Banking in Sintra, Portugal. Her speech is titled ‘Price stability and policy transmission in the euro area.’
Key quotes
Inflation in the euro area is undesirably high.
This means moving gradually if there is uncertainty about the outlook, but with the option to act decisively.
The new instrument will have to be effective, while being proportionate and containing sufficient safeguards to preserve the impetus of member states towards a sound fiscal policy.
Measures to preserve transmission could be used at any level of interest rates – so long as they were designed not to interfere with the monetary policy stance.
Market reaction
The shared currency fails to capitalize on Lagarde’s comments on the new anti-fragmentations took likely to be introduced by the ECB in the July meeting.
EUR/USD is off the session highs of 1.0606 to now trade at 1.0575, down 0.07% on the day.
