ECB’s Villeroy: France’s Inflation Should Fall Back Under 2.0% By End Of 2022

France central bank Chair and ECB governing council member François Villeroy de Galhau reiterated on Tuesday that French inflation is likely to fall back under 2.0% by the end of 2022. However, should inflationary pressures prove more persistent, he added, he has no doubt that the ECB would adapt its monetary policy faster.

As for market reaction, the EUR/USD pair selling continues and the pair has now dipped below its 50 and 21-day moving average to trade in the 1.1320s, down about 0.7% on the day. Recent losses do not appear to have anything to do with Villeroy’s latest remarks which did not contain any new information/angles on ECB policy.

The European Central Bank’s inflation forecasts aren’t a “blind certitude” and the institution will take action if the price surge proves more persistent according to Francois Villeroy de Galhau. While the ECB was surprised by a bump in inflation that was higher and longer than it initially expected in recent months, officials including Villeroy have repeated they still expect pressures to fade in 2022.