European Central Bank (ECB) Governing Council member and French central bank governor Francois Villeroy de Galhau said on Wednesday, “Inflation in France should reach a peak during the first semester.”

Additional comments

“Expect growth in France to be slightly positive in 2023, slightly higher than the +0.3% forecast in December - before the expected recovery in 2024.”

“Now entering a new phase of monetary policy more comparable to a long-distance race.”

“It is preferable to reach the terminal rate by summer, by September at the latest.”

“We are committed to bring inflation back to 2% by end 2024.”

“Disinflation we will carry out will not lead to recession.”

Market reaction

EUR/USD holds the latest upside near 1.0635, adding 0.57% on the day. Hawkish ECB expectations drive the Euro through the roof. German inflation data is next in focus.