ECB’s Wunsch: Anti-fragmentation tool should have no limits if market moves are unwarranted

Dhwani Mehta FXStreet

European Central Bank (ECB) policymaker Pierre Wunsch said on Tuesday that the central bank’s new “anti-fragmentation tool should have no limits if market moves are unwarranted.”

Also read: Lagarde speech: There is optionality to raise by more in September

Additional quotes

ECB should avoid hard triggers based on spreads or single indicators for the anti-fragmentation instrument.

Credibility of fiscal policy should be key determining factor in the deployment of anti-fragmentation instrument.

Comfortable with a 50-bps rate hike in sept; 200 bps of hikes needed "relatively fast".

Inflation at risk of moving to a higher regime.

Market reaction

Amidst a bevy of ECB policymakers speaking on inflation and policy lately, EUR/USD is digesting the comments, currently trading flat at 1.0585.

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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