Statements on future monetary policy by the President of the European Central Bank, Christine Lagarde, put the euro under pressure on Monday. In the evening, the common currency fell well below the $ 1.14 mark and was 0.8 percent lower at $ 1.1360. Despite rapidly rising prices, Lagarde clearly rejected calls for a tighter monetary policy. At a hearing in the European Parliament, she admitted that the strong inflationary surge is likely to last longer than originally thought. But there is currently no indication of a departure from the policy of cheap money: “If we were to introduce tightening measures now, it would do much more damage than good.” Even suggesting a tightening in the short term would hurt the euro area economy. Lagarde reiterated that a rate hike was very unlikely in 2022. However, she does not want to speculate about the key interest rate in 2023.
The rate of inflation in the euro area was 4.1 percent in October. Oil prices also started the new trading week at a discount. In the evening, however, the price of a barrel of North Sea Brent was only slightly in the red at $ 82.07. The discussion about US oil reserves continues to shape the crude oil market. The background to this is the high oil prices. One way of reacting to the rise in oil prices is to resort to US national reserves. For some time now, market participants have been speculating about such a move. US President Joe Biden is also being urged to do so from within his own ranks. At the weekend, the Democratic majority leader in the Senate, Chuck Schumer, urged Biden to take the step. The sharp rise in oil prices is partly responsible for the high inflation rate, which recently climbed to a 31-year high in the USA and is contributing to Biden’s poor survey results.