European Central Bank (ECB) Governing Council Member and President of the Deutsche Bundesbank, Joachim Nagel, said during European trading hours on Wednesday that the central bank should be prepared for monetary policy adjustments if needed.

Remarks

From a monetary policy perspective, it remains advisable to react with caution, but to act decisively if necessary.

Monetary policy will maintain its vigilant stance.

From a geopolitical perspective, the past few weeks have been characterized by hopes and disappointments.

Market reaction

The Euro (EUR) has not shown any immediate reaction to ECB Nagel's comments. At press time, EUR/USD trades flat at around 1.1424 after giving back early gains.

Nagel’s cautious vigilance keeps Euro bulls in check

ECB’s Nagel scores 6.4/10 on FXS Speechtracker, below the historic 7.2/10 average, signaling a slightly softer tone versus past appearances. The emphasis on “react with caution, but act decisively if necessary” and a “vigilant stance” points to a moderately hawkish bias, but with less punch than usual, tempering immediate upside for the Euro.

The reference to recent geopolitical “hopes and disappointments” underscores event risk and justifies keeping options open for future tightening if shocks re-ignite inflation or financial stress. Overall, the speech supports a watchful, data-dependent posture that limits Euro downside but falls short of the stronger hawkish rhetoric that would markedly lift the currency.