Lane: Markets haven’t fully absorbed forward guidance

ECB chief economist Philip Lane said on Tuesday that it is challenging to reconcile the market rate pricing with forward guidance.

According to Lane, market expectations for future interest rates do not square with the European Central Bank’s guidance for no hike until inflation is seen stably at 2%.

“When you look at market prices of the forward interest rate curve I think it’s challenging to reconcile some of the market views with our pretty clear, straightforward forward guidance,” Lane told an online event.

“Markets may not have fully absorbed the ECB’s forward guidance,” Lane added. Europe’s shared currency came under modest selling pressure after these comments.

The EUR/USD pair, which touched a multi-week high of 1.1670 earlier in today’s session, was trading at 1.1632, where it was up 0.2% on a daily basis.