“Still see probability of rate hike higher than hold”: ECB’s Simkus expresses hawkish bias on rates

European Central Bank (ECB) Governing Council member and head of Lithuania's central bank, Gediminas Simkus, said during European trading hours on Friday that the chances of an interest rate hike in the near term are higher than maintaining the status quo. Simkus also ruled out fears of second-round effects of higher inflation.

Additional remarks

$100 oil will have repercussions on inflation.

Inflationary environment has increased.

No value in rushing with a decision now.

In September, again we'll have additional inflation data.

Still see probability of rate hike higher than hold.

We do not see second-round effects of higher inflation.

Inflation seen higher than target for a long time.

 Market reaction

A slight recovery move is seen in the Euro (EUR) following ECB Simkus's remarks. At press time, EUR/USD trades 0.1% higher to near 1.3325.