Draghi Bemoans Strong EUR Not Quitting ECB

July 15, 2014 Share Print 0

The recent rise in the value of the euro could stifle the flickering signs of growth in the euro zone, according to the President of the European Central Bank (ECB) Mario Draghi — who has also tried to quash rumors about his own future.

Speaking in front of the European Union Parliament’s economic and monetary affairs committee in Strasbourg, Draghi stressed that while the exchange rate is not a policy target for the ECB, he was closely monitoring the euro’s effects on the region’s struggle since the sovereign debt crisis of 2011.

“The exchange rate remains an important driver of future inflation in the euro area. Certainly, the appreciation that took place since mid-2012 had an impact on price stability. In the present context, an appreciated exchange rate is a risk to the sustainability of the recovery,” he said.

Resting at 1.20 against the dollar in mid-2012, the single currency has appreciated close to, but has not hit, the $1.40 level in recent months with the Fed continuing to pump extra liquidity into its economy and thus lowering the value of the greenback.

via CNBC

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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.