Is the Euro Still too Strong?

Euro has weakened quite a bit recently, but, even so, some European policymakers believe that the 18-nation currency is still too strong.

A strong euro is likely to hinder the eurozone economic recovery, and that is just what some policymakers think is happening now. In spite of efforts from the ECB to stimulate the economy and weaken the euro, some think that the 18-nation currency remains too strong.
Yesterday, Bank of France Governor Christian Noyer expressed his doubts that the euro was weak enough to prompt economic progress for the eurozone. The ECB has a target of 2 per cent inflation, the eurozone is well below that. Even with recent efforts to stimulate the economy by weakening the currency, it’s been difficult to move forward.
While the sentiment didn’t prompt huge losses for the euro, today the currency is trading rangebound against its major counterparts, unable to get a clear upper hand. There are still questions about what sanctions to Russia will do to the eurozone economy, and concerns about what options are left available to the ECB.
At 10:32 GMT EUR/USD is holding steady at the opening level of 1.2924. EUR/GBP has inched a little higher to 0.7953 from the open at 0.7951. EUR/JPY is also a little higher at 138.5435 from the open at 138.3450.

If you have any questions, comments or opinions regarding the Euro,
feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *