The euro was stronger against the dollar yesterday, despite cautious rhetoric from the European Central Bank. However, it has weakened slightly this morning
Hawkish remarks from the ECB’s chief economist, Philip Lane, and ECB official, Fabio Panetta, yesterday, suggest that the ECB are not looking to raise interest rates yet. Despite this, ECB Rehn said on Tuesday that although inflation is temporary, if it lasts much longer then households and firms will start to lift their price expectations.
It was a light day for European data yesterday, but today inflation data is due to be released. A month-on-month and year-on-year increase is expected.
