ECB Philip Lane: Oil shock to require rate hikes

The European Central Bank (ECB) Chief Economist Philip Lane crossed the wires, saying that the energy shock caused by the Iran war will require a restrictive policy at a conference in London.

Lane said that “a mid-size but not-too-persistent overshoot could warrant some measured adjustment,” adding that the response has to be “appropriately forceful or persistent” on

Lane reaffirmed the ECB's line that "a mid-size but not-too-persistent overshoot could warrant some measured adjustment" while the response had to be "appropriately forceful or persistent" would require a firmer or longer-lasting policy reaction.

EUR/USD reaction on the headline

The EUR/USD bounced off around the 1.1700 figure, past the 100-day Simple Moving Average (SMA) of 1.1708, which could open the door for further gains. Up next is the 20-day SMA at 1.1730.