ECB's Nagel: Inflation surge not entirely due to temporary factors

New member of the European Central Bank's Governing Council and Bundesbank President Joachim Nagel argued on Tuesday that the inflation surge in the euro area was not entirely due to temporary factors, as reported by Reuters.

"It's true that high inflation rates can be attributed to special effects that expire automatically. But not entirely," Nagel explained. "I see a danger that inflation could remain high for longer than expected."

Nagel further added that the inflation outlook remains "extraordinarily uncertain." 

Market reaction

Nagel's hawkish tone doesn't seem to be helping the shared currency gather strength. The EUR/USD pair was last seen posting small daily gains at 1.1330.