ECB’s Nagel: Rate hikes are not necessarily over

European Central Bank (ECB) policymaker and Bundesbank Chief Joachim Nagel said on Tuesday, “rate hikes are not necessarily over. “

Additional comments

Would have to hike again if inflation outlook worsened.

Premature to discuss about rate cuts, would prefer to err on the side of caution.

Inflation outlook is encouraging but core inflation dynamics continue to be strong.

It's too early to declare victory over inflation.

The large ECB balance sheet must shrink significantly.

Market reaction

At the time of writing, EUR/USD is trading 0.13% lower on the day at 1.0939, unfazed by the above comments.