ECB's Wunsch: 25 or 50 bps rate hike in May possible

European Central Bank (ECB) Governing Council member Pierre Wunsch told Reuters on Friday that the ECB won't go from a 50 basis points rate hike in March to a zero in May. Wunsch added that a 25 bps or a 50 bps hike was possible in May.

"If core remains persistent, if we keep seeing core momentum being close to 5%, for me a terminal rate of 3.5% would be a minimum," Wunsch further explained and noted that the market reaction to ECB's hawkish tone on Thursday was surprising.

Market reaction

The EUR/USD pair showed no immediate reaction to these comments and was last seen posting small daily gains at 1.0930.