The underestimated price pressures | 01 سبتمبر 2021

EURUSD trading plan:

Euro zone inflation surged to a 10-year-high in August with further rises likely, challenging the European Central Bank’s benign view on price growth and its commitment to look past what it deems a temporary increase. Consumer inflation in the 19 countries sharing the single currency accelerated to 3% this month from 2.2% in July, far above expectations for 2.7% and moving well clear of the ECB’s 2% target. ECB chief economist Philip Lane argued that these inflation surprises still did not challenge his views about the temporary nature of price pressures as wage growth, a necessary component of durable inflation, remained muted. While ECB policymakers are acknowledging that they underestimated price pressures in the near term.

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