Euro’s Appreciation Worries Some ECB Board Members, FT Says
(Bloomberg) -- European Central Bank policy makers are concerned about the euro’s appreciation and warned that further gains will weigh on exports and bring down prices, the Financial Times reported. The common currency extended losses.
Several members of the ECB’s governing council said the currency’s gains against the dollar and other peers risk holding back the eurozone’s recovery, the newspaper reported without naming them.
“The message coming from the ECB is of note, as we rarely hear on the currency,” said Patrick Bennett, strategist at Canadian Imperial (JO: IPLJ ) Bank of Commerce. “The specter of deflation is rising across the globe. The consensus is that U.S. real yields have undermined the dollar, but the ECB looks to be pushing back.”
The comments echo what ECB chief economist Philip Lane said Tuesday, when he noted that moves in the euro will impact the common region’s monetary policy setting. While the euro’s gains is part of a broader slide in the dollar, the 19-nation European currency union is particularly exposed because of its relatively heavy reliance on exports and its long record of feeble inflation.
The euro extended its losses to drop 0.4% to $1.1806 at 1:49 p.m. in Tokyo.
©2020 Bloomberg L.P.
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