ECB’s Lagarde: Eurozone activity could be back at pre-pandemic levels by year-end

European Central Bank (ECB) President  Christine Lagarde said on Wednesday, speaking at the ECB Forum on Central Banking, that the resolution of the current bottlenecks is uncertain and should fade during the first half of next year.

According to Lagarde, the Eurozone could be back at pre-pandemic levels by year-end. She mentioned they would be watching wage negotiations in the region. Regarding inflation, she explained expectations have gone up but are still distant from their targets. She has not seen any signs of “contamination” of second-round effects.

Market reaction

Market participants have ignored comments from the ECB panel amid no surprises. The key driver of the forex market continues to be the stronger US dollar. The EUR/USD pair is down almost a hundred pips, testing 1.1600.