- Now is not the time for the ECB to move interest rates
- We are in a good position to move interest rates in any way if needed
- We have yet to see the full impact of recent euro appreciation
- Policymakers are on monitoring mode with regards to the euro strength
- There are concerns that a strong euro might be reflective on dollar weakness, uncertainty
The remarks on their policy stance aren’t anything surprising. The ECB remains sidelined at the moment and for the foreseeable future amid ongoing concerns on inflation still.
As for the remarks on the euro, it once again says a lot about the situation when almost every policymaker at the central bank has to comment about it. That not only speaks to their concerns about the currency but it also speaks to the urgency and how the current level is something that markets have to be mindful of as well.
As a reminder, ECB vice president Luis de Guindos had previously coined the 1.20 level for EUR/USD as one that is “complicated” for the central bank. And that seems to be the key line in the sand in terms of the pain threshold for the ECB.
