No cause yet for ECB alarm over euro strength

  • Date: 05-Sep-2020
  • Source: Zawya
  • Sector:Economy
  • Country:Jordan
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No cause yet for ECB alarm over euro strength

That pace of gains was last seen in mid-2017, a time of optimism about economic growth - in marked contrast to the current appreciation that coincides with the deflationary and recessionary impact of a pandemic.As inflation turned negative in August for the first time since 2016, some economists placed the blame on the euro and piled on the pressure for the ECB to actECB chief economist Philip Lane delivered the first salvo, saying the exchange rate "does matter" for monetary policy, while the Financial Times quoted unnamed ECB sources as saying euro strength was concerning.Yet it may be premature for the ECB to announce any steps at its Sept. 10 meeting.Euro strength stems not solely from U.S. assets' vanishing interest rate advantage over Europe, but from improved sentiment towards Europe's