The European Central Bank (ECB) policymaker Ewald Nowotny was on wires, via Reuters, during the weekend. Mr. Nowotny expects interest rates to be lower in the long term than they have been historically.
Key quotes
- In the long term, we should strive to have a normalization.
- We will likely have an interest rate level that is somewhat higher than it is today, but still lower than we have grown accustomed to from earlier times.
FX implications
Although no major impact on the news could be witnessed during the week-start trading session, the recent ECB decision could weigh on the Euro during the long-term. However, the EUR/USD pair will surge if this week’s fed is anything less than a dovish cut.
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