Noting that fiscal policy risk is adding to inflation pressure, European Central Bank policymaker Pablo Hernandez de Cos said on Wednesday that the ECB will continue to raise interest rates significantly at future meetings at a steady pace.

"Keeping interest rates at tight levels will reduce inflation by dampening demand and will also protect against the risk of a persistent upward shift in inflation expectations," De Cos told a financial event in the evening.

EUR/USD update

EUR/USD rose to a seven-month high on Wednesday but is now treading water into the US Consumer Price Index event on Thursday which traders hope to get some clarification of where interest rates are headed. At its highest level since May 31, EUR/USD reached 1.0776 on Wednesday, moving up from a low of 1.0725.