The European Commission (EC) announced on Monday that it lowered the euro area economic growth forecast for 2022 to 2.7% from February's forecast of 4%. For 2023, the growth forecast got revised lower to 2.3% from 2.7% as well.

The EC sees the euro area inflation at 6.1% in 2022 vs 3.5% predicted in February but expects it to decline to 2.7% in 2023, still way above the European Central Bank's (ECB) target of 2%.

"By exerting further upward pressures on commodity prices, causing renewed supply disruptions and increasing uncertainty, the war is exacerbating pre-existing headwinds to growth, which were previously expected to subside," the EC explained in its publication.

Market reaction

The EUR/USD pair edged slightly lower from the session highs on this report and was last seen trading at 1.0420, where it was up 0.1% on a daily basis.