Earlier today, Austrian central banker Nowotny reiterated comments from Draghi last week that the ECB does not have an exchange rate target.
It was not always the case, however. Back in 2004, Jean-Claude Trichet stemmed a euro rally by calling exchange rate movements “brutal”.
The exchange rate at the time? Around 1.30.
6-odd years later and a sovereign debt crisis under its belt, is an exchange rate of 1.33 more or less brutal than it was in 2004? Arguably, more.
It will be interesting to see if Draghi maintains his hand-off attitude toward exchange rates. As we’ve recently seen, he can change his opinions on a dime. In December he was signalling rate cuts. In January, all was right with the world…
