Ecb Member Hints Halting Rate Hikes

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Ecb Member Hints Halting Rate Hikes

ECB Member Hints At Halting Rate Hikes Amid Cooling Inflation

According to Francois Villeroy de Galhau (member of the ECB & Bank of France's President), the monetary policy of the ECB appears to be effective. He added that the proof of this can be seen in the form of cooling inflation.

Now that the inflation in the Euro area is showing signs of decline, the ECB member also added that it justifies the need to halt the rate hikes. Given the current state of the economies around the world, these comments by the ECB members are of paramount importance.

ECB Will Adopt Wait & See Approach

ECB's Villeroy said that the European Central Bank will likely be patient when it comes to the rate hikes or even rate cuts. That's why the probability of holding the interest rate without any change is very high.

As for why the ECB will be holding rates, he cited that the interest rates will take time to propagate in the EU economy.

He clarified that the process of measuring the rate isn't accurate at all. That's why it is normal to justify the need for suspicion as well as interpretation by the ECB officials.

Meanwhile, another member of the ECB highlighted that the EU economy is going through stagflation as of late.

That's why many experts believe that any rate cuts will only occur once the inflation reaches 2% or below. Elsewhere, the labor markets of the EU countries are very resilient, which also gives more legroom to the ECB.

The comments from the ECB members didn't have any effect at all on the bulls of the EUR/USD. That's why the EUR/USD continued to gain ground on Friday and was last seen near 1.0865.

Next week, the market's focus will shift towards the upcoming economic data from the EU and the US to determine the EUR/USD's next trend.

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