Francesco Pesole from ING says the discussion about how a strong Euro affects ECB policy is getting more heated. Some ECB members are worried that a strong Euro could lead to lower inflation and make the ECB less strict with its policies. The report also mentions that while there's an expectation of a recovery in the Dollar, it might not have a big impact on the EUR/USD exchange rate unless the price drops below 1.190.
ECB policy and the strength of the euro are causing worries.
The recent rise in the EUR/USD exchange rate has made two members, Martin Kocher and Francois Villeroy, worry that a stronger euro could lead to lower inflation, which might result in easier monetary policies.
If the price goes above 1.20 again today, it might lead to more price swings upwards. The high from Monday, which was 1.208, could be tested again.
We'll need to see a big drop below 1.190 before we can say the trend is changing for this pair.
ECB policy and the strength of the euro are causing worries.
The recent rise in the EUR/USD exchange rate has made two members, Martin Kocher and Francois Villeroy, worry that a stronger euro could lead to lower inflation, which might result in easier monetary policies.
If the price goes above 1.20 again today, it might lead to more price swings upwards. The high from Monday, which was 1.208, could be tested again.
We'll need to see a big drop below 1.190 before we can say the trend is changing for this pair.
