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ECB's Villeroy: Euro appreciation has a transparent disinflationary impact

  • Strong euro may increase the risk of undershooting on inflation
  • Closely watching exchange rate volatility
  • Don’t see any inflationary effects from US tariffs
  • ECB is in a good position on rates and inflation
  • But must remain completely optional on rates

He’s not the first one to be touching on the euro currency in the past few weeks. That’s as good a signal as any that policymakers are definitely keeping a close eye on things. I mean, they seldom – if ever – comment on the currency levels so it is worth noting.

This article was written by Justin Low at www.forexlive.com.

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