By Paul Hannon

The euro's move against the U.S. dollar in advance of and since the European Central Bank's decision to lower its key rate have been too small to have an impact on inflation in the eurozone, ECB Chief Economist Philip Lane said Tuesday.

The ECB's Thursday decision to lower its key rate to 3.75% from 4% widened the gap with the Federal Reserve. That risked a weakening of the currency against the U.S. dollar, raising prices of imported goods and services and a fresh source of inflationary pressures.

But in a speech in Dublin, Ireland, Lane said currency moves to date hadn't been significant.

"The exchange rate has been incredibly stable," he said. "The market did not respond very much. The fluctuations we are seeing would be invisible in an inflation calculation."

Lane said that in the absence of big currency swings, the ECB would continue to set its key rate with a focus on economic developments within the eurozone.

"We are not subordinate to the Fed," he said.


Write to Paul Hannon at paul.hannon@wsj.com


(END) Dow Jones Newswires

06-11-24 0758ET