EUR / USD has gained nearly 2% this quarter despite the resurgence of the coronavirus in the eurozone. The resistance of the common currency puts downward pressure on inflation and is of concern to the European Central Bank (ECB).
According to Robin Brooks, chief economist at the Institute of International Finance (IIF), the central bank should extend the duration of its quantitative easing or asset purchase program to outperform the US Federal Reserve (Fed) and drive down the EUR.
“The basic problem is that the Fed outperformed the ECB“Brooks tweeted, adding that the central bank should not cut the deposit rate and refrain from talking about the exchange rate.
The interest rates of the main refinancing operations of the ECB, the marginal credit facility and the deposit facility remain at 0.00%, 0.25% and -0.50%.
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