ECB's Wunsch: 25 or 50 bps rate hike in May possible

Eren Sengezer FXStreet

European Central Bank (ECB) Governing Council member Pierre Wunsch told Reuters on Friday that the ECB won't go from a 50 basis points rate hike in March to a zero in May. Wunsch added that a 25 bps or a 50 bps hike was possible in May.

"If core remains persistent, if we keep seeing core momentum being close to 5%, for me a terminal rate of 3.5% would be a minimum," Wunsch further explained and noted that the market reaction to ECB's hawkish tone on Thursday was surprising.

Market reaction

The EUR/USD pair showed no immediate reaction to these comments and was last seen posting small daily gains at 1.0930.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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