ECB's Wunsch: One Rate Hike May Be Enough If No Significant Second-Round Effects

ECB's Wunsch Signals Potentially Shorter Tightening Cycle

European Central Bank Governing Council member Pierre Wunsch remarked that one rate hike could be enough provided there are no substantial second-round effects. This dovish-leaning statement indicates that if inflation pressures do not trigger a wage-price spiral, the ECB may conclude its hiking cycle sooner than previously anticipated. Following the news, the euro edged lower against the dollar, while European equity index futures showed limited reaction. Market participants will now focus on upcoming eurozone inflation and wage data for further policy clues.