logo |

News

    Home   >     Industry    >     Main body

    Lagarde Says Euro Gains Blunted Stimulus Boost to Inflation

    Abstract:SHARE THIS ARTICLE ShareTweetPostEmailWant the lowdown on European markets? In your inbox before th

      SHARE THIS ARTICLE

      Share

      Tweet

      Post

      Email

      Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.

      President Christine Lagarde said the recent appreciation of the euro has partly offset the positive impact that the European Central Banks stimulus had in boosting inflation and reiterated that policy makers stand ready to adjust all of their instruments if needed.

      The Governing Council will carefully assess all the information coming from the euro-area economy, including developments in the exchange rate, with regard to their impact on the medium-term inflation outlook, she said on Sunday.

      “When it comes to meeting our price stability goal, there is and there will be no complacency,” Lagarde argued in her remarks at the meeting of the Council of Governors of the Arab Central Banks and Monetary Authorities. “Monetary policy will continue to play its role in the euro area with full commitment to its mandate.”

      Her comments show the predicament that the ECB is facing with the euro jumping more than 10% since March, and inflation below zero for the first time in four years.

      Lagarde‘s cautious remarks on Thursday, when the central bank kept its stimulus settings on hold, failed to stop the currency’s gain. Chief Economist Philip Lane sought to toughen the tone on Friday, warning that the appreciation this year has dampened the outlook for price growth.

      Finnish governor Olli Rehn followed up on Saturday, arguing that underlying price pressures in the euro area have stabilized at a low level that isn‘t in line with the ECB’s goal of inflation just below 2%.

      Vice President Luis de Guindos called the exchange rate “one of the most important variables” in terms of macroeconomic performance, and said the institution is monitoring it closely.

      The single currency opened little changed on Monday, trading at $1.1857 at 9:33 a.m. Frankfurt time. Earlier this month it crossed $1.20 for the first time in more than two years.

      Delicate Balance

      With their flurry of comments, ECB policy makers are attempting to strike a delicate balance between voicing concerns about the currency‘s surge and avoiding any impression that they’re deliberately trying to weaken the currency.

      Read more: ECB Officials Walk a Fine Line in Struggle to Contain Euro Gains

      Lagarde said on Sunday that the euro-area economic recovery has been strong, but also uneven, uncertain and incomplete. The challenging economic environment continues to weigh on underlying prices.

      Despite the ECBs stimulus measures, such as its 1.35 trillion euro ($1.6 trillion) emergency bond-buying program, “other factors, such as the appreciation of the euro have partly offset the positive pull,” she said. “Near-term price pressures will also remain subdued due to the recent appreciation of the euro exchange rate.”

      (Updates with exchange rate in eighth paragraph)

    United Arab Emirates Dirham

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand

    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand
    Current Rate  :
    --
    Amount
    United Arab Emirates Dirham
    Available
    -- United States Dollar
    Risk Warning

    The Database of WikiFX comes from the official regulatory authorities , such as the FCA, ASIC, etc. The published content is also based on fairness, objectivity and fact. WikiFX doesn't ask for PR fees, advertising fees, ranking fees, data cleaning fees and other illogical fees. WikiFX will do its utmost to maintain the consistency and synchronization of database with authoritative data sources such as regulatory authorities, but does not guarantee the data to be up to date consistently.

    Given the complexity of forex industry, some brokers are issued legal licenses by cheating regulation institutes. If the data published by WikiFX are not in accordance with the fact, please click "Complaints "and "Correction" to inform us. We will check immediately and release the results.

    Foreign exchange, precious metals and over-the-counter (OTC) contracts are leveraged products, which have high risks and may lead to losses of your investment principal. Please invest rationally.

    Special Note, the content of the Wikifx site is for information purposes only and should not be construed as investment advice. The Forex broker is chosen by the client. The client understands and takes into account all risks arising with Forex trading is not relevant with WikiFX, the client should bear full responsibility for their consequences.