European Central Bank (ECB) Governing Council member Klaas Knot told the Dutch TV on Tuesday that a 50 basis points rate hike should not be excluded if data in the next few months suggest that inflation is broadening and accumulating.

"The ECB needs to normalize policy," Knot added, per Reuters, and reiterated that a 25 basis points rate hike in July would be realistic.

Market reaction

EUR/USD jumped above 1.0500 with the initial reaction to these comments and was last seen rising 0.8% on the day at 1.0515.