ECB's Knot sees little obstacle to another rate cut next week

European Central Bank (ECB) policymaker and a hawk Klaas Knot noted on Wednesday that he “sees little obstacle to another rate cut next week.”

Further comments

Data is encouraging, confirms that we'll return to target.

Hopes to see recovery in economy, then we'll take it from there.

There is new downside risk from trade policy on growth, impact on inflation not so clear.

But pretty comfortable with market expectations for the next two meetings.

But if recovery continues, not too convinced that we need to into "stimulative mode".

Separately, his colleague Yannis Stournaras said that “rates should be close to 2% by end of the year.”

Market reaction

EUR/USD maintains its offered tone near 1.0400 following these dovish comments, losing 0.16% on the day.