His speech today covered two important aspects. Their views on growth and exit strategy and secondly the EUR. In respect to growth, European policy makers remain cautious and are aware that the recovery will be a ‘bumpy road’. Being ultra-conservative in nature, it would be imprudent to ‘call the end to the crisis and not an appropriate time to talk about the good time’. ECB is expected to leave rates on hold and ‘wait until non-standard’ measures expire in a few months. As for the currency itself, Trichet makes it blatantly clear that the ECB are ‘not willing to see the EUR as the main reserve currency. He went on to say that volatility in the Forex market was not welcome and all policy makers support the policy of a strong USD. One has to believe like most other Cbankers out there, they are all concered about their own domestic currency appreciating too much!
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