In an interview with Reuters on Tuesday, European Central Bank (ECB) policymaker Bostjan Vasle said there are early signs that wage pressures in the euro area could become material and pose inflation risks.

Additional takeaways

“ECB should end the Pandemic Emergency Purchase Program (PEPP) in March if economic trends continue.”

“Real financing conditions remain favourable despite nominal yield rises.”

“Open to discussion on keeping some but not all of PEPP’s flexibility.”

Market reaction

The EUR/USD pair consolidates its impressive daily gains ahead of the American session and was last seen rising 0.45% on the day at 1.1660.