European Central Bank (ECB) chief economist Philip Lane noted on Monday that they need to make sure that wage inflation is normalizing after having above-normal wage increases for several years, per Reuters.

"I would say we’re confident that it's on track," Lane added and explained that they can consider reversing interest rate increases once the ECB becomes more confident that wage growth is slowing and inflation is heading back to the 2% target as projected.

Market reaction

EUR/USD clings to small daily gains at 1.0820 following these comments.