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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EUR
ECB's Villeroy this morning: "Let me stress this: we will carefully monitor developments in the effective exchange rate, as a significant driver of imported inflation." And "a euro that is too weak would go against our price stability objective.” To put the exchange rate move in context, when considering what "too weak" might mean:
- The daily nominal EER-42 euro effective exchange rate, the rate eyed by the ECB in its macroeconomic projections, was 115.52 on Friday. A monthly close at this level would be the weakest since late 2017. (It traded to a daily low just below 114 in Feb 2020 but rebounded by end-month.)
- On a year-on-year monthly close basis, a close here would mean the Euro index is falling at its fastest rate (-5.5%) since late 2015.
- The index would have to fall about 12% further to reach its low of the last decade (in 2016), or around 28% further to reach its all-time low in 2000.
- The ECB's March 2022 projections' technical assumptions included 118.7 average this year (and 2023-24), and 1.12 USD/EUR, based on spot value at the time. It's averaging 118.1 in 2022 so far. If it stays level at 115.52 for the rest of the year, it will average around 116 for the year as a whole.
Source: ECB, BBG
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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