Merkel to let Market set EUR Rate

In deep contrast with other world leaders. German Chancellor Angela Merkel is not calling for her currency’s devaluation.

German Chancellor Angela Merkel’s government dismissed calls by French President Francois Hollande to steer the euro’s exchange rate, saying currencies should be determined by the market and not managed.
As Merkel travels to Paris today to meet with Hollande on the eve of European Union budget talks, German government spokesman Steffen Seibert didn’t rule out a discussion over the French president’s warning about a rising euro. Hollande said yesterday that euro leaders can’t allow the single currency to fluctuate “according to the mood of the market.”
“Exchange-rate policy isn’t an appropriate instrument to boost competitiveness; it relies on short-term stimulus through targeted depreciation,” Seibert told journalists in Berlin. “Sustained competitiveness can’t be achieved in this way.”

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza