French central bank head and European Central Bank (ECB) policymaker Villeroy de Galhau said on Thursday that they could cut rates in the next meeting, barring a major surprise, per Reuters.

Key takeaways

"The risk would be to be behind the curve and to pay a too high cost bin terms of economic activity."

"It is time to take an insurance against risk of being behind the curve.

"After the first rate cut, we will monitor inflation data."

"Inflation is coming back to target."

"We are focused on domestic price stability."

"The good news is we have avoided recession, though growth in Europe is insufficient."

"When inflation is receding, it is time to go back to structural transformation."

Market reaction

The EUR/USD pair inched slightly lower following these comments and was last seen losing 0.1% on the day at 1.0660.