The news about a possible Israeli attack on Iran’s nuclear facilities are causing an increase in EUR/USD this morning and show that the euro is still favored as a safe refuge against the dollar. However, this does not seem to be a problem, at least for the ECB. The euro fort is an opportunity, since it is a sign that Europe is perceived as a stable economic and political area. This was heard a few days ago from the president of the ECB, Christine Lagarde, says Thu Lan Nguyen, head of research of CommerzBank’s currency and raw materials.
The market may want to operate the euro even higher
“These words must have surprised enough people. In the first place, it is generally unusual for the president of the ECB to comment on the exchange rate. After all, it is not an objective variable of monetary policy. The fact that this is normally adhered strictly is due, in part, that the states of the G7 have committed to not manipulating their change rates, that is, to leave them to the market forces.”
“Lagarde’s comments on the recent appreciation of the euro are positive. Normally, exactly the opposite would be expected. The declaration of the G7 mentioned above explicitly establishes that a ‘competitive devaluation should be avoided. Lagarde could now be interpreted by the market as an invitation to operate the euro even higher. “
“The fact that the ECB seems to be happy with a strong euro at this time smells like it wants In fact, being a problem. “
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
