ECB Member Says Bank Will Keep and Eye on Strong EUR

April 23, 2014 Share Print 0

The European Central Bank must keep an eye on the euro exchange rate to assess whether it poses a risk to the medium-term inflation outlook, ECB Governing Council member Ardo Hansson said on Wednesday.

In recent weeks, the ECB has spoken frequently about the currency and warned that any further strengthening could lead it to use unconventional tools such as asset purchases.

Hansson, the head of the Estonian central bank, told Reuters on the sidelines of a news conference that while the ECB “will never target” the exchange rate, the fact that inflation is low means “you probably have some heightened focus.”

“So I think we have to keep an eye on it,” he said of the exchange rate.

Asked whether he was watching a particular threshold for the euro, he replied: “No.”

via Reuters

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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.