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European Central Bank (ECB) Vice President Luis de Guindos addressed the possibility of changes to monetary policy in response to evolving inflation dynamics during a statement on Thursday, according to Reuters reports. De Guindos emphasized that if the ECB’s updated assessment of the inflation outlook, underlying inflation dynamics, and the effectiveness of monetary policy transmission channels instill greater confidence in the sustained convergence of inflation to the target, it would warrant consideration for reducing the current level of monetary policy restraint.
He noted that inflation has exhibited a continued decline throughout the year, with expectations of a gradual deceleration in the medium term.
Despite these remarks, the market response remained muted, with the EUR/USD pair demonstrating minimal reaction and trading marginally higher at 1.0680 by the end of the day.
