Minutes from the latest ECB meeting have just been released, however impact on market is rather limited.
Here are key takeaways from the document:
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Inflation was far too high and likely to stay above the governing council's target for an extended period
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A large number of members favored raising the key ECB interest rates by 75 basis points
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Expectations for inflation remained stable, and wage growth remained moderate, with little evidence of second-round effects.
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Over the entire projection horizon, the risks associated with the projected inflation path remained skewed to the upside.
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The euro's depreciation could exacerbate inflationary pressures in the eurozone.
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The size of the upward revision in the staff inflation projection for 2024 was not deemed large enough to necessitate a more aggressive response.
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The expected slowdown in economic activity would not be sufficient to significantly reduce inflation.
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In July, the median three-year inflation expectation stood at 3%.
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Without a timely reduction in monetary policy accommodation, inflationary pressures caused by euro depreciation may worsen.
EURUSD barely reacted to the release of ECB minutes. The most popular currency pair continued to trade above 0.9850 level. Source: xStation5
