ECB's Centeno: A faster than warranted increase in rates may backfire

European Central Bank (ECB) Governing Council member Mario Centeno argued on Thursday that a faster increase in rates than warranted may backfire, as reported by Reuters.

"I do not see a deanchoring of inflation expectations," Centeno added and said that higher interest rates would push up funding costs and diminish fiscal space. "Normalisation will not be constrained by fiscal considerations," Centeno further noted.

Market reaction

The EUR/USD pair continues to push lower following these remarks and it was last seen losing 0.8% on the day at 0.9655.