ECB's Schnabel: Eurozone inflation surge is temporary, no need for rate hike now

The surge in eurozone inflation is temporary and the prices should decelerate next year, the European Central Bank (ECB) executive board member Isabel Schnabel said in an interview with the German broadcaster ARD early Thursday.

Key quotes

"This means we will keep financing conditions favorable in order to support the economy.”

"There is no reason for an interest rate hike at the moment."

Note that amid a rally in commodities prices, the bloc’s inflation is approaching the central bank’s 2% target.

Market reaction

EUR/USD is trading around 1.2190, up 0.15%, as the US dollar reverses FOMC minutes-led gains. The Fed hinted towards tapering bond-buys on Wednesday, triggering a sharp rally in the US dollar and the yields.