Lagarde offers four subtle changes to make the Euro appreciate

Euro boom? Not so fast, because everything has slowed down in Europe, but the European Central Bank has acknowledged this improvement in a subtle way. European Central Bank President Christine Lagarde has issued three related statements that may stabilize the euro and possibly push the euro to new highs.

These are four positive changes:

Risk balance

Even during the time of Lagarde’s predecessor and current Italian Prime Minister Mario Draghi (Mario Draghi), the European Central Bank claimed that risks were gradually reducing. For now, this change is subtle. Although the Frankfurt-based institution still views short-term risks as unfavorable, it now says these risks are balanced over the medium term.

The renewal is mainly due to the acceleration of vaccination in Europe, but also to the increase in global demand. European politicians appear to be satisfied with the economic prosperity of the United States. The risk comes from the possible resurrection of the virus and its variants.

Firm bounce

The European Central Bank acknowledged that, despite not using the strictest terms, stronger growth is on the horizon. However, Lagarde mentioned that although the economy may contract in the first quarter, there are signs that the industries that are more sensitive to the service sector still persist. Similarly, the second trimester can be very strong.

You may also be interested in:

Strong growth and the Eurozone may seem like a contradiction to some, but the Old World may undergo great expansion in response to changes.

The rate of inflation may increase

Here, too, warnings appear first. Lagarde said the recent rise in consumer prices is due to what may be temporary “trait” factors. However, he added that inflation may rise in the coming months and once the epidemic subsides, the inflation rate will continue to rise.

Since the European Central Bank is officially responsible for inflation, this improvement is significant.

PEPP is not removed

The bank reiterated its commitment to strengthen its bond purchase program through the Pandemic Emergency Purchase Program (PEPP) in the second quarter, which will allow governments to boost the economy. Also, in answering a question, Lagarde said that the council did not even discuss the PEPP phase-out plan, which means it still has a long way to go. She classifies these rumors as premature.

Although the Fed’s printing of the dollar puts pressure on the dollar, the European Central Bank’s approach to creating the euro is different because it promotes economic growth rather than devaluing the currency.

You may also be interested in:

To end

While maintaining its support, the European Central Bank acknowledged the improving outlook. This is a case of favorable conditions for the universal currency.

Deja un comentario