financetom
Euro-Dollar
financetom
/
Forex
/
Euro-Dollar
/
Euro up 0.70%, ECB's Knot Talks of Large Rate Hike in July
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Euro up 0.70%, ECB's Knot Talks of Large Rate Hike in July
Mar 22, 2024 2:17 AM

Above: ECB Board Member and Head of the Dutch central bank, Klaas Knot. Image © ECB.

The European Central Bank (ECB) looks increasingly likely to raise interest rates in July with one member of the Governing Council warning a surprisingly large hike could be delivered.

Dutch central bank governor Klaas Knot said in an interview Tuesday the ECB should raise its key interest rate by 25 basis points in July, but should not yet rule out a bigger increase.

Knot's comments were quoted by Dutch TV programme College Tour.

The comments shore up the prospect for a July rate hike but opening the door to anything greater than a 25 basis point hike represents a hawkish surprise from a currency perspective.

This sentiment is expressed through a stronger Euro against the Dollar: EUR/USD has risen 0.70% by the time of writing to quote at 1.0511. (Set FX rate alert here).

"The first interest rate hike is now being priced in for the monetary policy meeting of 21 July, and that seems realistic to me," Knot said.

He said the ECB should keep the door open to a bigger move if incoming data over the next few months would suggest that inflation is "broadening further or accumulating". "A bigger increase must not be excluded either... a logical next step would amount (to) half a percentage point," he said.

Knott's comments come a day after ECB Governing Council member François Villeroy de Galhau expressed concern that the Euro was too weak and was therefore contributing to inflation.

"Let me stress this: we will carefully monitor developments in the effective exchange rate, as a significant driver of imported inflation," Villeroy told a conference at the Bank of France.

The commentaries form the latest in a series of signals the ECB is preparing the market for rate hikes in response to surging inflation, a development which could underpin the Euro's outlook against the Dollar, particularly if expectations for Federal Reserve rate hikes are at a saturation point.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
EURUSD surrenders to the negative pressure-Analysis-25-04-2025
EURUSD surrenders to the negative pressure-Analysis-25-04-2025
May 25, 2025
The EURUSD declined in its recent intraday trading, affected by the continuous negative pressure due to its stability below the EMA50, accompanied with a negative technical formation that completed previously on the short-term basis, which is the rising wedge pattern. Additionally, the emergence of negative overlapping signals on the (RSI), after reaching exaggerated overbought levels compared to the price movement,...
EURUSD moves in a limited range -Analysis-28-04-2025
EURUSD moves in a limited range -Analysis-28-04-2025
May 25, 2025
The EURUSD price settled on a slight decline in its recent intraday trading, due to the continuous negative pressure from its trading below EMA50, to keep moving in limited range of tight sideways trading, holding above 1.1310 support, taking advantage from the emergence of the positive signals on the (RSI). This came because of the domination of a bearish correctional...
EURUSD suffers from negative pressure -Analysis-08-05-2025
EURUSD suffers from negative pressure -Analysis-08-05-2025
May 25, 2025
The EURUSD declined in its recent intraday trading, with the emergence of the negative signals on the (RSI), after reaching overbought levels previously, to surpass the support of its EMA50, which increases the negative pressure on its upcoming trading. The last decline led the price to settle again below 1.1340, which reinforces the negative scenario amid the dominance of the...
EURUSD suffers from negative pressures-Analysis-24-04-2025
EURUSD suffers from negative pressures-Analysis-24-04-2025
May 25, 2025
The EURUSD settled bearishly in its recent intraday trading, affected by the technical formation negativity, which was formed previously on the short- term basis, represented by the rising wedge pattern, which causes correctional pressures on the price. The continuation of the trading below EMA50, besides the emergence of weakness signals from the (RSI), after offloading some of the exaggerated oversold...
Copyright 2023-2025 - www.financetom.com All Rights Reserved