24 Apr 2014
Euro drops slightly on Draghi's comments
FXStreet (Łódź) - ECB chief Mario Draghi said on Thursday that the exchange rate is not a policy target but that a further strengthening of the euro could trigger more easing.
"A rise in the exchange rate, all else being equal, implies a tightening of monetary conditions, a downward impact on inflation and potentially a threat to the ongoing recovery,” Draghi said. “If so, this would call for policy action to maintain the current accommodative stance.”
He stressed however that the Governing Council didn't see broad based deflation risks in the Eurozone.
Speaking at the "Conference De Nederlandsche Bank 200 years: Central banking in the next two decades" in Amsterdam, the ECB head also suggested that if the medium-term outlook for inflation deteriorated, the central bank could initialize broad-based asset purchases.
Furthermore, Draghi said that the Governing Council was discussing the possibility of publishing minutes from the monetary policy meetings as well as changing the frequency with which the meetings are held.
The euro fell somewhat after Draghi’s comments to the 1.3830/20 region.
"A rise in the exchange rate, all else being equal, implies a tightening of monetary conditions, a downward impact on inflation and potentially a threat to the ongoing recovery,” Draghi said. “If so, this would call for policy action to maintain the current accommodative stance.”
He stressed however that the Governing Council didn't see broad based deflation risks in the Eurozone.
Speaking at the "Conference De Nederlandsche Bank 200 years: Central banking in the next two decades" in Amsterdam, the ECB head also suggested that if the medium-term outlook for inflation deteriorated, the central bank could initialize broad-based asset purchases.
Furthermore, Draghi said that the Governing Council was discussing the possibility of publishing minutes from the monetary policy meetings as well as changing the frequency with which the meetings are held.
The euro fell somewhat after Draghi’s comments to the 1.3830/20 region.