ECB's hawkish Knot doesn't rule out a 50 bp hike

1:27 PM 25 May 2022

Knot once again shows himself from a very hawkish side, although of course being the head of the central bank in the Netherlands, he usually showed such traits. Today, however, he points to an interesting outlook:

  •  We have 2 more inflation readings before the July meeting
  • Inflation expectations are anchored at the upper range of ECB forecasts
  • In July, only a rate hike is under the bank's consideration
  • A 50bp hike is not ruled out

These words, however, do not strengthen the euro, but a 50bp hike would indeed be a surprise. EURUSD continues to retreat, after testing the range of the largest correction in the trend. Currently, the 23.6 retracement of the entire current rebound is being tested, and the RSI is at a relatively low level. On the other hand, there was a descent below the 2 moving averages on the H1 chart. 

Source: xStation5

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