The euro is at the highest level compared to the dollar in four years.
This year has already increased by 14 percent. The ECB wonders if the growth of euro is a blessing or curse, because it would be a continuous growth (even if the euro exceeds $ 1.20) could cause disinflation pressures and disallow the achievement of targeted two percent inflation.
“The ECB does not want to admit, but a powerful euro causes concerns. The further strengthening of the euro will not only lead to lower inflation, but also to problems for exporters, and thus the Dutch Financial Group Ing, SEEbiz.
The European Central Bank has already reduced interest rates in its latest attempt at mitigation of monetary policy. It is expected that this year will once again reduce the interest rate on deposits (to 1.75 percent), but most likely not at the meeting in July.
