Euro jumps notably after ECB President Christine Lagarde made no special reference to its strength in the introductory statement of the post-meeting press conference. Lagarde just said, “in the current environment of elevated uncertainty, the Governing Council will carefully assess incoming information, including developments in the exchange rate, with regard to its implications for the medium-term inflation outlook.”

In the latest economic projections, 2021 GDP contraction was revised up to -8.0% versus -8.7% as forecast in June. 2021 GDP growth was revised down to 5.0%, from 5.2%. 2022 GDP growth was also revised down slightly to 3.2%, from 3.3%.

Overall balance of risks to growth outlook is “seen to remain on the downside”, “largely reflects the still uncertain economic and financial implications of the pandemic”.

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2020 HICP inflation was unchanged at 0.3%. But 2021 HICP inflation forecast was revised up to 1.0%, from 1.8%. 2022 HICP inflation forecast was also left unchanged at 1.3%.


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