- Continuation of FX developments would trigger action
- ECB doesn’t follow exchange rate objective but FX has an increasingly high impact on inflation outlook
Comments on BBG
Reuters has the bold comment in better context;
Draghi has made it clear that if FX developments continue to impact inflation that will inevitably trigger an ECB reaction
The comment from Bloomberg is what’s sending the euro lower but it’s nothing of note. We’ve lost 10 pips from 1.3837 to 1.3827
I’m starting to get a little edgy over my EUR/USD longs with all this FX talk. It’s one thing tuning out the government asshats harping on about the high euro, even though they economically did diddly squat with it when it was trading around the 1.20/30’s, but it’s another to keep hearing it from the ECB. It’s playing on my mind whether the ECB will hit us with some form of action irrespective of the data, unless it’s big upward moves in inflation. Jawboning isn’t doing it. I was looking for an attempt on 1.40 but may take what’s on offer in the run up to the next ECB meeting, dependant on the data. If they do act I’ll be looking to hoover it up much lower down.
