European Central Bank (ECB) policymaker Joachim Nagel argued on Friday that the ECB's current interest level was not high in comparison to rates of inflation in the Eurozone, as reported by Reuters.

"Wage developments are likely to prolong the prevailing period of high inflation rates," Nagel said in a lecture in Edinburgh. "In other words: Inflation will become more persistent."

"It will be necessary to raise policy rates to sufficiently restrictive levels in order to bring inflation back down to 2% in a timely manner," Nagel further added.

Market reaction

EUR/USD failed to capitalize on these hawkish comments and it was last seen losing 0.9% on the day at 1.0733.