France central bank head and ECB governing council member François Villeroy de Galhau reiterated on Tuesday that French inflation is likely to fall back under 2.0% by the end of 2022. However, should inflationary pressures prove more persistent, he added, he has no doubt that the ECB would adapt its monetary policy faster. 

Market Reaction

EUR/USD selling continues and the pair has now dipped below its 50 and 21-day moving average to trade in the 1.1320s, down about 0.7% on the day. Recent losses do not appear to have anything to do with Villeroy's latest remarks which did not contain any new information/angles on ECB policy.