The European Central Bank has said it will monitor what impact the stronger euro is having on the region’s economy to make sure it does not derail the recovery.
After the ECB left its main interest rate at 0.75 percent at the monthly policy meeting, Bank chief Mario Draghi said the euro was actually near its long-term average: “The (euro’s) appreciation is, in a sense, a sign of return of confidence in the euro.”
He added: “The exchange rate is not a policy target, but it is important for growth and price stability and we will certainly want to see whether the appreciation – if sustained – will alter our risk assessment as far as price stability is concerned.”
A stronger euro makes the bloc’s exports less competitive. The euro hit a 15-month peak of $1.3711 on February 1.
Economists say the problem for the ECB is that it is not really equipped to fight a currency war in which other countries are devaluing, to boost exports and so grow their economies.
After Draghi spoke the euro fell to its lowest level in a week against the dollar – under $1.34 – and sank against the yen.
That was a reaction to the ECB’s views on the state of the eurozone economy.
Draghi spoke of negative risks as he said economic weakness was “expected to prevail in the early part of 2013” but later in the year, activity should gradually recover.
On that basis, economists continue to believe the ECB is not likely to change interest rates until at least July next year.
Copyright © 2014 euronewsMore about:
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2Sweden becomes first EU country to recognise the Palestinian State | euronews, world news
- 3Italy swamped by flash floods | euronews, world news
- 4Back to School for Romania’s new First Lady | euronews, world news
- 5What will you ask US Senator John McCain? | euronews, world news
- 6Watch: Passengers ‘push-start’ frozen plane in Siberia | euronews, world news
- 7Turkish president Erdogan unveils his new palace of a thousand rooms | euronews, world news
- 8India PM Modi appoints Yoga minister | euronews, world news
- 9[Live] Rosetta’s Philae lands on comet 67P and enters the history books | euronews, world news
- 10European e-revolution people rise up | euronews, world news
- 11Vladimir Putin most powerful man in the world – Forbes | euronews, world news
- 12International tv news | euronews: European and International tv news bulletin
- 13Where is the best place in Europe for women? | euronews, world news
- 14Nadia Comaneci: gymnast of perfection and defector | euronews, the global conversation
- 15euronews apps : iPhone, iPad, Android, Windows Phone 8, Windows 8, Nokia S40, Nokia Asha, Smart TV and Google Glass
- 16Irony as organised crime prosecutor arrested for corruption in Romania | euronews, world news
- 17Putin plans to leave G20 talks early amid Ukraine pressure | euronews, world news
- 18International breaking news | euronews online world breaking news in video
- 19Transcript of hanged Iranian woman’s final message released | euronews, world news
- 20Catalonia announces new ‘independence plan’ | euronews, world news
Wires > Business
- 17:35 CET Venezuela paves way to legalise foreign currency black market
- 17:21 CET Indian growth slows less than feared, easing pressure for rate cut
- 16:58 CET EU banks have until 2020 to build up bigger safety buffer
- 16:51 CET Inside OPEC room, Naimi declares price war on U.S. shale oil
- 16:50 CET Standard Chartered hit with first S&P downgrade in 20 years
- 16:47 CET Barclays’ banking and mortgage complaints rise in third quarter
- 16:39 CET FTSE levels off as consumer spending counters energy slide
- 16:37 CET Intesa says Coutts international arm less valuable than whole group