ECB Coeure: Euro Rise Source of Uncertainty; Must be Monitored

By Jack Duffy

     PARIS (MNI) - The shock caused by a strongly rising euro exchange can lead

to an unwarranted tightening of monetary conditions and needs to be monitored,

European Central Bank Executive Board member Benoit Coeure said Monday. 

     Speaking in Frankfurt, Coeure said the Eurozone's current expansion is

being driven largely by domestic demand so the euro's rise may have less of an

impact than in the past. 

     But "exogenous shocks to the exchange rate, if persistent, can lead to an

unwarranted tightening of financial conditions with undesirable consequences for

the inflation outlook," Coeure said.

     "Against this background, the recent volatility in the exchange rate

represents a source of uncertainty which requires monitoring," he said.

     More

--MNI Paris Bureau; tel: +33 1-42-71-55-41; email: jack.duffy@marketnews.com

[TOPICS: M$X$$$,M$$EC$]