ECB’s Villeroy: Reasonable to raise rates into positive territory by year-end

Dhwani Mehta FXStreet

Commenting on the interest rates outlook, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said Friday, it is “reasonable to raise rates into positive territory by the year-end.”

Further comments

“Inflation expectations are less and less anchored at 2% now.”

“Must watch exchange rate developments.”

“Too weak a euro jeopardizes price stability objective.”

“Real rates will stay significantly negative and below neutral for some time.”

“Case for APP beyond June not obvious.”

“Reasonable to raise rates into positive territory by year-end.”

“Neutral nominal rate in eurozone seen between 1% and 2%.”

“ECB should offer new ltro facility to banks.”

“New anti-fragmentation tool could sterilize excess liquidity or eventually sell bonds.”

Market reaction

EUR/USD is rebounding towards 1.0550, as the US dollar eases from fresh two-decade highs ahead of the critical US NFP release.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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