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- Lagarde set to comment on global economic outlook as ECB blackout period begins
Lagarde set to comment on global economic outlook as ECB blackout period begins
- Christine Lagarde will speak again on Friday at the World Economic Forum in Davos.
- ECB President is unlikely to mention monetary policy in her panel discussion.
- European Central Bank held rates for the second straight meeting in December.
Christine Lagarde, President of the European Central Bank (ECB), is set to speak on Friday at 10:00 GMT at the World Economic Forum (WEF) in Davos. It will be the last of her three appearances at the WEF Annual Meeting this week.
Having spoken on the "How to Trust Economics" panel on Wednesday and "Uniting Europe's Markets" on Thursday, ECB President Lagarde will participate in a panel discussion on "The Global Economic Outlook".
Friday’s debate will offer views on how policymakers would balance the need for action on growth and inflation by implementing the right tools while ensuring sustained and long-term economic growth. Lagarde’s comments will be closely scrutinized for any hints on the Euro area growth and inflation outlook, which could have a significant impact on policy-making.
However, she is unlikely to mention monetary policy during her commentary on the economic outlook, as the ECB has entered its “blackout period” ahead of next week’s policy meeting.
On Wednesday, Lagarde spoke in a Bloomberg interview on the sidelines of the WEF Annual Meeting in Davos, noting that “it is likely that we will cut rates by the summer.”
Christine Lagarde’s remarks prompted markets to dial back early rate cut expectations. ECB policymakers have continued to push back against aggressive rate cut expectations, suggesting that the central bank will remain data-dependent on its interest rate outlook.
The European Central Bank held rates for the second meeting in a row in December, as it revised down its growth and inflation forecasts. “The Governing Council’s future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary,” the ECB said in its accompanying statement.
About Christine Lagarde
Christine Lagarde was born in 1956 in Paris, France. Graduated from Paris West University Nanterre La Défense and became President of the European Central Bank on November 1st 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007–2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005–2007).
Euro price today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Pound Sterling.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.09% | 0.27% | 0.03% | 0.08% | 0.13% | 0.26% | 0.09% | |
| EUR | -0.09% | 0.18% | -0.05% | -0.02% | 0.04% | 0.17% | 0.00% | |
| GBP | -0.31% | -0.22% | -0.28% | -0.24% | -0.18% | -0.05% | -0.22% | |
| CAD | -0.03% | 0.06% | 0.24% | 0.02% | 0.09% | 0.23% | 0.05% | |
| AUD | -0.06% | 0.05% | 0.28% | -0.03% | 0.07% | 0.22% | 0.07% | |
| JPY | -0.13% | -0.06% | 0.16% | -0.10% | -0.08% | 0.18% | -0.04% | |
| NZD | -0.26% | -0.22% | 0.03% | -0.28% | -0.24% | -0.12% | -0.18% | |
| CHF | -0.08% | 0.04% | 0.18% | -0.05% | -0.02% | 0.07% | 0.16% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
ECB FAQs
What is the ECB and how does it influence the Euro?
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region.
The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
What is Quantitative Easing (QE) and how does it affect the Euro?
In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro.
QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.
What is Quantitative tightening (QT) and how does it affect the Euro?
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.
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