29 Oct 2013
Nowotny: ECB has no instruments to fight euro appreciation
FXstreet.com (Barcelona) - ECB Governing Council member Ewald Nowotny said today that the central bank has no tools which could be used to counter the strength of the single currency. The euro jumped above 1.38 following the comments.
Nowotny suggested that it was unlikely that the central bank would cut the refi rate or the depo rate further and stressed that the monetary policy stance would remain accomodative. He added however that there was still room to maneuver on liquidity.
He expressed confidence that the economic situation in the Eurozone was improving and that the recovery was gathering momentum. He also assured that the ECB would not accept a haircut on Greek debt.
As Jamie Coleman comments on FXBeat: “By essentially declaring the ECB has no weapons with which to fight the strong EUR, Nowotny has unleashed the euro bulls. Not exactly what his colleagues at the ECB or withing the Eurogroup want to see.”
Nowotny suggested that it was unlikely that the central bank would cut the refi rate or the depo rate further and stressed that the monetary policy stance would remain accomodative. He added however that there was still room to maneuver on liquidity.
He expressed confidence that the economic situation in the Eurozone was improving and that the recovery was gathering momentum. He also assured that the ECB would not accept a haircut on Greek debt.
As Jamie Coleman comments on FXBeat: “By essentially declaring the ECB has no weapons with which to fight the strong EUR, Nowotny has unleashed the euro bulls. Not exactly what his colleagues at the ECB or withing the Eurogroup want to see.”