European Central Bank policymaker Pablo Hernandez de Cos noted on Thursday that inflation in the euro area has surprised consistently on the upside over the last few quarters and in recent months, per Reuters.
Additional takeaways
"We should now use PEPP reinvestment flexibility proactively, monitor whether it is sufficient to ensure our monetary policy is appropriately transmitted across the euro area."
"A premature tightening of monetary policy would only add to the negative consequences."
"In a highly uncertain scenario, including geopolitical tensions in Ukraine, ECB should not constitute an additional source of uncertainty."
"ECB should rather maintain a clear, gradual and predictable path for its policy."
"Monetary policy direction in which we need to head is clear but we should not draw premature conclusions as to the time frame."
"Process will be both gradual and data-dependent."
Market reaction
The shared currency stays on the back foot after these comments and the EUR/USD pair was last seen losing 0.12% on a daily basis at 1.1358.