ECB unlikely to intervene despite Euro's rapid appreciation – TD Securities
TD Securities notes the recent strength of the Euro (EUR), which has appreciated by 4% against the USD in under two weeks, breaking the 1.20 level. The European Central Bank (ECB) has expressed concerns about this move, but it is unlikely to alter its monetary policy stance.

TD Securities notes the recent strength of the Euro (EUR), which has appreciated by 4% against the USD in under two weeks, breaking the 1.20 level. The European Central Bank (ECB) has expressed concerns about this move, but it is unlikely to alter its monetary policy stance. ECB President Lagarde's comments suggest a more hands-off approach compared to previous interventions.

ECB unlikely to intervene on EUR strength

"The recent EUR strength raised eyebrows at the ECB, as the USD selloff has led to a 4% appreciation in EUR in under two weeks and a break in the 1.20 level. Since then, several ECB speakers made mention of the move with concerns regarding the bloc's trade and competitiveness."

"We will keep hearing comments from ECB members on the EUR, but this is very unlikely to shift the Governing Council's view as a whole or take the deposit rate off its current perch of 2.00%."

"The ECB has been clear that it does not target exchange rates. Though the pace of appreciation was a concern back in '17 with Draghi using verbal intervention as financial conditions tightened, Lagarde has been more sanguine."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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