ECB's Lagarde: Downside risks to economy increased substantially. Inflation risk higher.

Highlights from ECB Lagarde press conference: Downside risk to the economy increase substantially initial signs of inflation expectations above target warrant monitoring risk to inflation outlook tilted to the upside in near term; upside risks intensified inflation is more widespread inflation is mainly driven by energy core inflation rise is uncertain reopening of sectors after pandemic, strong labor market to support incomes The EURUSD has moved to the downside on the initial comments from ECBs Lagarde and trades above and below the 200 hour MA at 1.0871. More:APP is likely to end in Q3. Could be early or late in Q3. Open minded about specific and within Q3Some time after is anything between a week in several monthsunwarranted fragmentation should be avoidedthe longer inflation will remains high the more likely it is for negotiated wages to risewe cannot be riveted to projections, have to look at other datalast thing we want is inflation expectations at risk of the anchoringWe are normalizing policy and have a sequence for what we will be doing going forwardWe are on a journey with regard to monetary policy.  We will assess timing of asset purchases in JuneSometime after the APP ends, we can make decisions on ratesHave to keep in mind that below is the very high inflation rates, but we are also seeing medium-term outlook for inflation gradually moving back toward our target and possibly belowEconomy in the euro area is much different than the economy in the USEuro areas were exposed as a result of the war in UkraineComparing ECB and US respective monetary policies is comparing apples and orangesTotally premature to say one flexibility will be deployedGoverning council meeting didn't focus on FX ratesThe press conference concluded at 9:27 AM ET/1327 GMTThe EURUSD fell sharply on the back of the comments reaching a low of 1.08157. The price has bounced a touch and trades at 1.08287 currently.