In a statement on Friday, Martins Kazaks, a member of the European Central Bank‘s (ECB) Governing Council, acknowledged that geopolitical issues were exerting a dampening effect on growth in the Euro area. Despite this, he emphasized the importance of avoiding premature rate cuts, considering the current circumstances.
Kazaks highlighted the presence of negative supply-side shocks as a compelling reason for exercising patience, even in the wake of geopolitical tensions, citing the contained nature of the situation in the Red Sea thus far.
Market Reaction
The remarks from Kazaks did not elicit an immediate response from the EUR/USD, which exhibited no significant movement. The currency pair was observed to be down by 0.15% on a daily basis, closing at 1.0830 as of the latest update.
